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Nasdaq Index, Dow Jones, S&P 500 News: Futures Drifting Lower Ahead of Start of Fed Meeting

By:
James Hyerczyk
Updated: Jun 11, 2024, 13:27 GMT+00:00

Key Points:

  • Stock futures dip with the start of June’s Federal Reserve policy meeting today.
  • Eli Lilly's shares climb 3% after FDA panel supports Alzheimer’s drug approval.
  • Elon Musk threatens to ban Apple devices from Tesla over OpenAI security concerns.
Dow Jones, Nasdaq-100, S&P 500 Index

In this article:

Stock Futures Dip Ahead of Fed Policy Meeting

Stock futures inched lower on Tuesday as traders awaited the start of June’s Federal Reserve policy meeting. This follows a modestly positive day on Wall Street, with the S&P 500 and Nasdaq Composite achieving record closes, while the Dow gained nearly 0.2%.

At 11:38 GMT, Dow futures are trading 38768.00, down 161.00 or -0.41%. S&P 500 Index futures are at 5353.25, down 18.00 or -0.34% and Nasdaq futures are trading 19043.75, down 66.00 or -0.35%.

Fed Meeting On-Tap

The two-day Federal Reserve policy meeting kicks off today, with the key interest rate decision expected on Wednesday. Investors anticipate that the Fed will keep the borrowing rate unchanged, as indicated by CME’s FedWatch Tool, which shows virtually no chance of a rate cut at this meeting. U.S. Treasury yields fell as investors awaited the central bank’s decision and key economic data.

Economic Data in Focus

On Wednesday, the consumer price index (CPI) for May will be released, followed by the producer price index (PPI) on Thursday. Investors hope the data will indicate a cooling economy, which could prompt the Fed to consider rate cuts sooner. Despite concerns about elevated rates potentially leading to a recession, the economy has shown resilience. Investors will also scrutinize the Fed’s economic projections released alongside the rate decision.

Stocks in the News

Eli Lilly’s shares rose 3% after the FDA’s advisory panel recommended approval for its Alzheimer’s drug, donanemab. The FDA typically follows the panel’s advice, signaling potential full approval later this year.

Tesla CEO Elon Musk threatened to ban Apple devices from his companies if Apple integrates OpenAI at the OS level, calling it a security violation. Apple responded that its integration with OpenAI is optional and that it primarily uses its own AI. Apple shares dipped slightly in premarket trading, while Tesla’s stock remained flat.

Economic and Earnings Reports

Ahead of the Fed decision, investors will examine small business data due on Tuesday. On Wednesday, they will focus on the CPI reading for May. Corporate earnings from Oracle and Rubrik are also due after the bell on Tuesday.

Market Forecast

As the S&P 500 remains more than 12% above its 200-day moving average, analysts at BTIG suggest that the index may not sustain this level for long, despite its current uptrend. Given the upcoming economic data and the Fed’s decision, traders are likely to remain cautious in the short term. While the market is poised for potential pullbacks, any signs of economic cooling could shift sentiment toward anticipating future rate cuts, influencing a more bullish outlook in the near term.

Technical Analysis

 

Daily E-mini S&P 500 Index

E-mini S&P 500 Index futures are edging lower on Tuesday, hovering just below the all-time high at 5385.50. A trade through this price level will signal a resumption of the uptrend.

On the downside, the nearest support is a minor pivot at 5295.50. Should this fail, traders should brace for a move into the support cluster formed by the 50-day moving average at 4223.95 and the short-term bottom at 5205.50.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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