Wall Street futures mixed as markets hunt clues on imminent Fed move

By Johann M Cherian and Pranav Kashyap

(Reuters) -U.S. stock futures were mixed in choppy trade on Monday, as investors weighed the odds of an imminent Federal Reserve rate cut in December while combing fresh data for clues on the central bank’s next move.

Stocks hit a volatile patch this month as investors worried the AI boom may be morphing into a bubble, while a prolonged U.S. government shutdown starved Wall Street of the economic data it relies on to gauge the health of the world’s largest economy.

Dovish remarks from influential New York Fed President John Williams offered some respite on the policy front last week but was also a reflection on how divided policymakers were ahead of December’s FOMC meeting.

Investors are pricing in a 75% chance the central bank will deliver a 25-basis-point interest rate cut next month, compared with 42% a week earlier, according to CME Group’s FedWatch Tool.

“Our base case remains for the FOMC to deliver a follow-up cut. However, convincing the “many” policymakers that favor keeping rates unchanged the rest of the year to lean towards a cut will be challenging amid the void in key U.S. statistics,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman.

At 07:01 a.m. ET, Dow E-minis were up 24 points, or 0.05%, S&P 500 E-minis were up 22 points, or 0.33%, and Nasdaq 100 E-minis were up 136.5 points, or 0.56%

CONSUMER RESILIENCE IN SPOTLIGHT AS HOLIDAY SEASON KICKS OFF

Retail sales and producer prices data for September is expected through the week ahead of the holiday shopping season that starts with the Thanksgiving holiday on Thursday, extending into Black Friday and Cyber Monday.

Consumption patterns, the backbone of the American economy, will be scrutinized at a time when multiple companies announced layoffs, delayed official data pointed to rising unemployment and U.S. tariffs weighed on sentiment.

The National Retail Federal said it expected U.S. holiday sales to surpass $1 trillion for the first time. Last week, Walmart, the United States’ largest retail chain, raised its annual forecasts. Shares of Walmart were up 0.2% in premarket trading.

Earnings from consumer-oriented companies including Dick’s Sporting Goods and Best Buy are expected later this week.

TECH VALUATION WORRIES PERSIST

Despite AI-bellwether Nvidia’s strong forecast last week, ballooning valuations of the tech sector has plagued markets for much of this month.

Wall Street’s main indexes are now headed for monthly losses in November, with the benchmark S&P 500 and tech‑heavy Nasdaq on track for their steepest declines since fears of a tariff hike sparked a selloff in March.

Deutsche Bank lifted some of the gloom, projecting the S&P 500 would surge to 8,000 by the end of 2026, citing resilient corporate earnings and AI‑driven gains – the most bullish call among major global brokerages.

Meanwhile, Bristol-Myers gained 3.8% after European rival Bayer unveiled positive late-stage data for its cardiovascular drug.

Some U.S. health insurers and hospital operators gained after a report said Trump’s health plan could see subsidy extensions for two years.

Centene surged 6.2%, Oscar health rose 13.8%, Molina healthcare was up 3.8% and Unitedhealth gained 1.1%.

(Reporting by Johann M Cherian, Pranav Kashyap and Shashwat Chauhan in Bengaluru; Editing by Krishna Chandra Eluri)