US markets fall ahead of Fed decision: futures slide, oil above $106 a barrel

US stock futures slid Sunday evening, days ahead of the Federal Reserve’s expected decision on interest rates, while crude oil prices climbed above $106 a barrel.

After 6:00 p.m. Eastern time, futures for the Nasdaq 100 fell 1.1%, those for the S&P 500 lost 0.5%, while Dow Jones futures dropped 0.3%, or 171 points.

Brent crude rose more than 2%, topping $106 a barrel, while US WTI crude climbed nearly 2% to around $102 a barrel.

It was a tough week for Wall Street: the Dow fell 1.6%, posting its worst week since March, the S&P 500 lost 0.8% and the Nasdaq dropped 0.7%. The yield on the 10-year US Treasury bond reached 4.97%, the highest since October 2023, while the 30-year yield crossed 5.35% — the first time since 2007.

Markets expect Federal Reserve Chair Kevin Warsh to announce an interest rate hike following the two-day meeting of the Federal Open Market Committee on Tuesday and Wednesday. According to the CME’s FedWatch tool, the probability of a hike is above 86%.

Investors will watch Warsh’s post-decision press conference closely, seeking clues as to whether a potential hike would mark the start of a prolonged monetary tightening cycle or only a temporary pause.

Source: Barron’s

Photo: The New York Stock Exchange (Arild Vågen / Wikimedia Commons, CC BY-SA 4.0)