Market Watch: Calm Before the Fed Storm and Other Key Updates

US stock futures were relatively subdued on Monday, as investors braced for a crucial Federal Reserve policy decision later this week. The uncertainty looms large over whether the Fed will implement a 25-basis point cut or a more aggressive 50-basis point reduction. The Dow futures crept up by 0.20%, S&P 500 futures added 0.03%, while Nasdaq 100 futures saw a slight dip of 0.18% by 6:20 AM EDT.

Last week’s trading saw all major indexes inch higher, closing near two-week peaks. Speculation about a possible 50-basis point reduction fueled a rally, contrasting with earlier expectations of a more modest 25-basis point cut. Small-cap stocks, particularly those in the Russell 2000 index, benefitted notably from the buzz, climbing 4.4% as these firms are more sensitive to changes in borrowing costs.

In parallel, the news cycle was shaken by reports of a second alleged assassination attempt on former President Donald Trump. According to law enforcement sources, Trump was unharmed after the Secret Service thwarted the threat while he was golfing in Florida. This incident follows a previous attack two months ago during a rally in Pennsylvania.

Fed Decision in the Spotlight

All eyes are now on the Federal Reserve as it gears up for a high-stakes policy meeting on September 17-18. The CME Group's FedWatch Tool reveals a near-even split in market expectations: a 59% chance for a 50-basis point cut versus a 41% probability for a 25-basis point reduction. This close split underscores the market’s uncertainty following recent data showing stronger-than-expected producer and consumer price growth for August.

Former New York Fed President Bill Dudley has suggested a strong case for a 50-basis point cut, while analysts from Vital Knowledge argue that the focus on the rate cut’s size might be misplaced. They believe that regardless of the Fed’s decision, the overall tone is likely to be quite dovish.

Boeing Strike: A Prolonged Stand-Off

A strike at Boeing (NYSE:BA) could drag on, with over 30,000 workers demanding better pay and pensions. Union leader Jon Holden indicated that the current labor action might persist "for a while," emphasizing the workers' strong bargaining position. Although a tentative deal proposing a 25% wage increase over four years was previously backed by Holden, workers rejected it, leading to the strike's onset.

This prolonged labor dispute comes at a challenging time for Boeing, already grappling with production delays and regulatory scrutiny over jet safety. The company’s stock fell 3.7% on Friday and has plummeted over 37% year-to-date.

Disney and DirecTV Strike New Deal

Disney and DirecTV have resolved their distribution conflict, restoring access to Disney’s suite of channels for DirecTV’s 11.3 million subscribers. The deadlock had led to blackouts of popular networks like ESPN and ABC, affecting viewers' access to major events, including "Monday Night Football" and recent presidential debates.

The renewed agreement reportedly enhances Disney’s economic compensation and introduces new packaging options. DirecTV subscribers will now be able to bundle Disney channels by genre and gain access to Disney’s streaming services, including Disney+, Hulu, and ESPN+.

Oil Prices Stabilize

Oil prices hovered near the flatline on Monday as traders awaited the Federal Reserve's interest rate decision. However, gains were tempered by ongoing concerns over slowing global demand. Economic data from China showed disappointing results in industrial production, retail sales, and housing, while US production showed signs of recovery from Hurricane Francine’s impact in the Gulf of Mexico.

With market holidays in China and Japan, trading volumes were light. Brent crude futures for November held steady at $71.63 a barrel, while West Texas Intermediate crude futures edged up 0.39% to $69.04 a barrel by 6:20 AM ET.