U.S. Stock Index Futures Rise Ahead of Fed Decisions

(Reuters) – U.S. stock index futures gained ground on Monday as investors anticipated a Federal Reserve interest rate cut later in the week, alongside crucial economic data that could influence next year's policies.

The Fed's final rate decision of the year is scheduled for Wednesday, with traders pricing an over 97% chance of a 25 basis point rate reduction, according to CME's FedWatch.

Investor focus will be on the Fed’s outlook for next year, including an updated “dot plot” of forecasts, as expectations for future rate cuts moderate in light of strong economic growth and persistent inflation.

Analysts at SEB noted, "The main focus will be on the Fed, which is generally expected to cut by 25 basis points, but we believe that the Fed will lower expectations of rate cuts further ahead."

This week is packed with significant data releases. S&P Global's December flash manufacturing and services PMIs are due today, along with industrial production figures, retail sales, and personal consumption expenditure data throughout the week.

As of 5:45 a.m. ET, U.S. S&P 500 E-minis were up 11 points (0.18%), Nasdaq 100 E-minis increased by 67.75 points (0.31%), and Dow E-minis rose 31 points (0.07%).

This year has been bullish for stocks, driven by gains in AI-related shares, the beginning of the Fed's rate-cutting cycle, and anticipated pro-business policies from Donald Trump's incoming administration.

Shares of MicroStrategy rose 5.3% in premarket trading as the software company and bitcoin buyer prepared to join the tech-heavy Nasdaq 100 index.
Palantir (NASDAQ:PLTR) and Axon Enterprise (NASDAQ:AXON) saw gains of 0.8% and 3.3%, respectively, as they will also be added to the reconstituted index starting Dec. 23.
Meanwhile, Super Micro Computer (NASDAQ:SMCI), set to be removed from the index, dropped 12.3%.

Cryptocurrency stocks experienced a rise as bitcoin briefly surpassed $106,000 after Trump suggested creating a U.S. bitcoin strategic reserve akin to the strategic oil reserve.
Coinbase Global (NASDAQ:COIN) gained 2.6% and bitcoin miner MARA Holdings rose by 3.8%.