Traders work on the floor of the New York Stock Exchange (NYSE) on December 8, 2025 in New York City, USA.
Brendan McDiarmid | Reuters
Stock futures were little changed ahead of the Federal Reserve’s interest rate decision expected on Wednesday.
Futures, which track the Dow Jones Industrial Average, fell 19 points, or 0.03%. S&P futures and Nasdaq 100 futures remained below the flat line.
Stocks have fluctuated between modest gains and losses in recent trading as investors await this week’s last important Federal Reserve meeting of the year. The Fed is widely expected to cut rates by a quarter of a percentage point for the third time in a row, with federal funds futures showing an approximately 87% probability of a rate cut, according to CME’s FedWatch tool.
But sentiment remains divided among members of the Federal Open Market Committee, which decides interest rates, with some supporting lower rates to prevent a further downturn in the labor market and others believing further rate cuts could worsen inflation. Investors are trying to gauge member sentiment from post-meeting statements and Chairman Jerome Powell’s much-anticipated news conference Wednesday afternoon.
The market as a whole showed lackluster activity in the previous trading session. of S&P500 It closed 0.1% lower on Tuesday. Dow Jones Industrial Average The stock fell nearly 0.4%, weighed down by losses. JP Morgan KK. The Nasdaq Composite Index, which has a high proportion of high-tech stocks, rose about 0.1%. broadcom, tesla and Google’s parent alphabet.
However, sector rotation is occurring. of Russell 2000 Index of Small Caps On Tuesday, it hit a new intraday high on the prospect of further interest rate cuts. Small and medium-sized enterprises tend to benefit from interest rate cuts because their borrowing costs are more closely linked to market interest rates, potentially increasing their profit margins.
Doug Bies, global equity strategist at Wells Fargo Investment Institute, said that while the Russell 2000 has underperformed the S&P 500 this year, it has rebounded since Nov. 21 and has outperformed the broader market since that date.
“The positive changes in small-cap stocks are consistent with our view that the stock market is becoming broader,” Beas said. “We believe investors are looking beyond the current economic soft patch, expecting accelerated economic growth through 2026 due to positive long-term trends already underway, including the largest tax refund since 2021, deregulation, further Fed rate cuts, and continued increases in technology capital spending.”
