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Hello. I'm Patricia Kowsmann, bringing you the latest ahead of the opening bell Tuesday.
As Federal Reserve policymakers prepare to kick off their two-day meeting, traders keep lifting the chances of a supersize interest-rate cut.
Derivatives markets suggest the probability of a half-percentage-point reduction is roughly two-thirds, according to CME Group's FedWatch. That is up from about three-in-five on Monday. In another sign of investors positioning for easier monetary policy, 10-year Treasury yields were slipping for the ninth time in 11 days.
But is a big cut really on the cards? Our Nick Timiraos looks at the Fed's tough task of deciding how much to ease policy. The central bank's decision is due Wednesday.
Stock futures rose Tuesday. On Monday, the Dow reached a record , while the Nasdaq Composite slipped.
Follow our live coverage throughout the day for the latest news affecting markets.
Live Markets Snapshot Data refreshes every time you open this email. CONTENT FROM: MFS Investment Management What Matters Most? Rates or Fundamentals?
See how prior interest rate cutting cycles impacted stocks and what matters over time.
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Stocks to Watch
Intel: The company said it would cut more costs and further separate its chip-manufacturing and design operations. It has also struck a multibillion-dollar agreement with Amazon's cloud-computing arm. Intel shares rose about 6.5% in premarket trading.
Microsoft: The company raised its dividend and authorized a stock buyback of up to $60 billion . Shares rose 1.8% premarket.
Universal Music: The record label behind Taylor Swift, Billie Eilish and Ariana Grande said it expects high earnings and revenue growth for the next four years. Shares rose 3.5% in Amsterdam.
Flutter Entertainment: The FanDuel parent is buying Italian gambling company Snaitech from Playtech, in a deal valued at roughly $2.6 billion.
Camden Property Trust: Shares of the real-estate investment trust fell about 3% in offhours trading after it announced its third-quarter dividend.
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Fed Prepares to Lower Rates, With Size of First Cut in Doubt
By Nick Timiraos
The Federal Reserve is set to cut borrowing costs at its two-day meeting that ends Wednesday. The goal: preserve a solid job market now that price pressures have cooled.
The decision over whether to cut the Fed's benchmark interest rate, currently at a two-decade high between 5.25% and 5.5%, by either a larger half percentage point or by a traditional quarter point will come down to how Chair Jerome Powell leads his colleagues through a finely balanced set of considerations.
Economic data over the past several months show inflation has resumed a steady decline to the Fed's 2% goal. But the labor market has cooled, with the unemployment rate edging up to 4.2% in August from 3.7% at the end of last year.
"The key issue for them at this meeting is their sense of the balance of risks," said William English, a former senior Fed adviser.
Keep reading . Charting the Markets
Apple's shares fell nearly 3% Monday on reports indicating weaker demand for its iPhone 16 family and Pro lineup. iPhone Pro models play a key role in the company's ability to grow revenue.
Tesla's expansion of its Supercharger network has slowed in recent months , after widespread layoffs in April gutted the team responsible for installing new electric-car chargers and stations.
Consumers have been turning to one of the more expensive forms of borrowing-credit cards-in part because other kinds of credit have dried up . That could all change when the Fed begins cutting rates, writes Telis Demos for Heard on the Street.
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Must Reads
Federal debt is soaring. Both presidential candidates were part of administrations that produced growing deficits . Neither is likely to reverse that trend if elected.
A trial over future control of Rupert Murdoch's global media empire is under way. The patriarch wants to ensure that when he dies, control of a family trust passes to his oldest son. Three of his other children oppose .
Amazon wants its employees back in the office five days a week. Its chief, Andy Jassy, said the company believes there are significant advantages to having employees in the office full time.
More:
U.S. Officials Jet to Beijing Amid Flood of Cheap Chinese Exports Boeing Freezes Hiring, Delays Pay Raises as Strike Worsens Finances Lego's Business Cards Are Made of Lego-but Not for Long This Day in Markets On this day in 1998: Stock markets took a pounding after Fed Chairman Alan Greenspan dismissed plans for coordinated global interest-rate cuts amid the Russian debt crisis. In weeks the U.S. stock market bottomed out and headed straight up. Beyond the Newsroom
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About Us
We want to be the first place you go to get ready for the opening bell every day. This newsletter was written by Patricia Kowsmann ( @kowsmann ; patricia.kowsmann@wsj.com) .
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
September 17, 2024 06:36 ET (10:36 GMT)
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