U.S. stock futures rise ahead of Federal Reserve decision

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Stock futures ahead of Fed decision

Highlights

S&P 500 futures rise 0.4%, Dow futures add 154 points, and Nasdaq-100 futures gain 0.6% after last week's declines.
Brent crude closes up over 3% at $116.72 a barrel and WTI rises 3.8% to $103.27, as geopolitical tensions boost energy prices.
Moody's maintains France's Aa3 rating and negative outlook, citing debt expected to exceed 120% of GDP by 2027, while Fed rate policy decision looms with 90% odds for no change.

Futures rebound as markets weigh rates and energy prices

As reported by CNBC, stock futures rise on Sunday evening as traders try to recover from the S&P 500's weekly loss. S&P 500 futures are up 0.4%, Dow Jones Industrial Average futures add 154 points, or 0.3%, and Nasdaq-100 futures gain 0.6%.

Friday's sell-off pushes all three major averages lower, with the Dow dropping more than 650 points, the S&P 500 losing 0.5% and the Nasdaq Composite falling 0.2%. The decline leaves both the S&P 500 and the Nasdaq with back-to-back weekly losses.

Oil prices add to market pressure after Brent crude rises more than 3% to settle at $116.72 a barrel, its highest close since April, while U.S. West Texas Intermediate climbs 3.8% to $103.27 a barrel. Energy markets strengthen amid reports that the U.S. and Israel could be planning attacks on Iran after the midterm elections.

France credit outlook and Fed meeting stay in focus

France also remains on investors' radar after Moody's maintains the country's Aa3 credit rating and negative outlook, offering some relief after recent bond market turmoil. The country's 10-year bond yield touches 5% last week for the first time since 2002, raising concerns that the euro zone's second-largest economy could face a downgrade as borrowing costs surge.

Moody's says a significant and sustained fiscal effort will still be needed beyond the presidential elections of April and May 2027 to put France's public finances on stronger footing and stabilize a debt burden expected to exceed 120% of GDP in 2027. The agency adds that it could revise France's outlook to stable if the country's institutions reduce the deficit.

Traders are also awaiting the Federal Reserve's decision on Wednesday. Fed funds futures trading indicates a 90% likelihood that policymakers keep interest rates unchanged at the current target range of 3.75% to 4%.

In our earlier article on France’s efforts to restore investor confidence amid rising borrowing costs, we examined how political uncertainty and budget approval risks were driving French OAT yields to multi-decade highs. We also noted the government’s plan to bring the deficit down toward 3% of GDP by 2029, and the Banque de France’s view that fiscal consolidation is achievable without austerity despite mounting debt-servicing costs.

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