S&P 500 Steady as Traders Await Fed Decision, Powell’s Tone, and Mega-Cap Results

Markets Hold Steady Ahead of Fed Decision, Powell Remarks, and Big Tech Earnings

U.S. stock futures are flat early Wednesday as traders brace for a packed day — the Federal Reserve’s rate decision, Chair Jerome Powell’s press conference, and a flood of tech earnings after the bell. With the S&P 500 hovering near record highs above 6,900, few are willing to take new positions until the dust settles.

Fed Expected to Cut — But Balance Sheet Plans in Focus

The Fed is widely expected to deliver another 25-basis-point rate cut today, bringing its benchmark range down to 3.75%–4.00%. Markets are split on how much easing lies ahead — with odds evenly divided between 50 and 75 basis points of additional cuts by January, according to the CME FedWatch Tool. Some traders see today’s move as a preemptive step to cushion a softening labor market.

What could really move markets is the Fed’s message on its balance sheet. Bank reserves have fallen below $3 trillion, and repo funding rates have stayed sticky near the top of the Fed’s range — both warning signs of tightening liquidity.

Several firms, including JP Morgan and Barclays, now expect the Fed to end its quantitative tightening program immediately, citing funding stress and the need to stabilize short-term markets. A pivot toward reinvestment could help absorb new Treasury supply tied to the administration’s fiscal plans.

Powell’s Tone Could Set the Market’s Next Move

There’s anxiety around how Powell frames the outlook. Inflation is still running near 3%, and the Fed may not want to sound too dovish with equities at record highs. Yet Powell also knows the cost of tightening financial conditions too far. Traders will listen closely for any hint that the Fed is shifting from “cut mode” to “pause mode.” Even a subtle shift in tone could tilt risk sentiment for the rest of the year.

Earnings: The Market’s Second Big Test

Tech heavyweights — Microsoft, Alphabet, and Meta — report after the close, followed by Apple and Amazon on Thursday. Together with Nvidia and Tesla, the “Magnificent Seven” now account for nearly 37% of the S&P 500’s weight and over $22 trillion in market cap.

Any disappointment from these names could spark a broader pullback, especially with valuations stretched and AI optimism priced to perfection. Still, if margins hold up, it could reinforce the year’s powerful rally.

Bottom Line

Traders are sitting tight ahead of a triple catalyst day. The Fed’s decision, Powell’s tone, and Big Tech’s earnings will shape whether the market’s record run extends — or finally cools. For now, the mood is calm, but under the surface, positioning is razor-thin. The next move belongs to Powell and the megacaps.

More Information in our Economic Calendar.