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Futures lower, new record S&P 500 close, Fed speak - what's moving markets

Published 09/25/2024, 03:42 PM
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Investing.com -- Futures on Wall Street pointed lower on Wednesday following a fresh peak for the S&P 500 in the previous session. Investors will have the chance to parse through comments from Fed Governor Adriana Kugler, who will join a chorus of policymakers delivering statements this week on the central bank's large interest rate reduction last week.

1. Futures lower

US stock futures edged lower after the benchmark S&P 500 closed at a second-straight record high in the prior session.

By 03:26 ET (07:26 GMT), the S&P 500 futures contract had inched down by 12 points or 0.2%, Dow futures had slipped by 96 points or 0.2%, and Nasdaq 100 futures had fallen by 77 points or 0.4%.

The main averages on Wall Street closed in the green, echoing gains made in other international markets following China's announcement of new stimulus measures aimed at rejuvenating activity in the world's second largest economy. US-listed shares in Chinese stocks jumped, while copper and lithium miners advanced on a surge in metals prices.

Weighing on sentiment, however, was a report from the Conference Board showing that US consumer confidence unexpectedly dropped in September due to worries over the health of the labor market.

2. Fed's Kugler to speak

Federal Reserve Governor Adriana Kugler is due to speak on Wednesday, with markets keen to see if she will become the latest policymaker to deliver comments on last week's jumbo interest rate cut.

Kugler will give a speech at the Harvard Kennedy School at 16:00 ET, according the Fed. More Fed officials are scheduled to give public statements this week, including Chair Jerome Powell.

On Tuesday, Fed Governor Michelle Bowman defended her decision to vote against the super-sized 50-basis point interest rate cut and support a more traditional quarter-percentage point drawdown, flagging that major inflation readings remain "uncomfortably above" the Fed's stated target level.

Her stance contrasted with several other Fed officials earlier this week, who argued that the half-point cut was needed because high rates were placing too much pressure on the economy during a time when inflation appears to be fading and strains on labor demand are increasing.

3. US probing SAP, Carahsoft over potential price fixing - Bloomberg News

The U.S. government is probing German software firm SAP and product reseller Carahsoft over potentially overcharging government agencies for at least a decade, Bloomberg News reported on Wednesday.

The Department of Justice has been looking into whether business software maker SAP illegally conspired with Carahsoft to fix higher prices on sales to the US military and other government agencies, Bloomberg reported, citing federal court records filed in Baltimore. The investigation has been ongoing since at least 2022.

Carahsoft -- a major vendor of software -- saw its offices in Virginia raided on Tuesday by FBI agents and military investigators.

4. Gold touches new peak

Gold prices were slightly lower after hitting a fresh record high on Wednesday.

By 03:28 ET, spot gold was lower by 0.1% at $2,654.31 per ounce. It had earlier touched a record high of $2,670.43 an ounce in Asian trade.

The prospect of lower interest rates was a key support point for gold, as traders priced in a lower opportunity cost for investing in non-yielding assets. Gold also saw some safe haven demand sparked by heightened tensions in the Middle East.

Comments this week from Fed speakers, as well as the release of the Fed's preferred inflation gauge on Friday, could offer further insight into the path ahead for borrowing costs.

5. Oil dips

Crude prices slipped lower Wednesday, as traders reassessed the likely impact of fresh monetary stimulus from top importer China.

By 03:30 ET, the Brent contract dropped 0.5% to $74.08 per barrel, while U.S. crude futures (WTI) traded 0.7% lower at $71.08 per barrel.

Both benchmarks increased by just under 2% on Tuesday after China unveiled its latest barrage of stimulus measures. However, traders have noted that more help may be needed to boost the economic outlook for the world's largest importer of crude, according to Reuters.

Declining U.S. crude oil stockpiles provided some support for the market, as data from the American Petroleum Institute showed on Tuesday that crude inventories fell by 4.34 million barrels last week. Official numbers from the Energy Information Administration are due later in the session.

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