The Federal Reserve is set to announce its latest interest rate decision on Wednesday afternoon. Investors anticipate a 0.25 percentage point rate cut, with Fed funds futures indicating a 95% probability. The Summary of Economic Projections and Fed Chair Jerome Powell's press conference will provide insights into the central bank's outlook for the coming months.
There are expectations that the Fed will moderate the anticipation of further rate cuts in the upcoming year, particularly as inflation remains persistent. Analysts predict a hawkish tone from the Fed, potentially leading to a stock market selloff. However, it's believed that volatility following the Fed meeting will likely be short-lived. On Tuesday, most GICS sectors closed lower, with industrials significantly declining. Consumer discretionary was the only sector to gain, while all sectors remain positive year-to-date, led by communication services. Futures tied to major indices like the Dow Jones, S&P 500, and Nasdaq 100 were slightly below flatline after 6 p.m. ET