Stock market today: Dow, S&P 500, Nasdaq futures stall as Wall Street braces for Fed decision

US stock futures are flat as markets await the Federal Reserve's policy decision, with a 96% probability of a 25 basis point rate cut, and investors focused on the 'dot-plot' and Chair Powell's remarks for future easing guidance. This comes as Nvidia shares slipped 1.5% premarket following reports that China has instructed its major tech companies to cease purchasing Nvidia's AI chips, indicating escalating geopolitical tech restrictions. Separately, mortgage rates declined to October 2024 lows, boosting refinancing applications, while General Mills reported strong sales but warned of a challenging consumer environment.

Analysis

US equity markets are in a holding pattern, with futures on the Dow Jones and S&P 500 flat while Nasdaq 100 contracts are down 0.1%, as investors await the Federal Reserve's policy decision. A 25 basis point interest rate cut is overwhelmingly anticipated, with traders pricing in a 96% probability, shifting the market's focus to forward guidance. The primary catalysts will be the Fed's revised "dot-plot" projections and Chair Jerome Powell's subsequent press conference, which will provide crucial insight into the potential pace of future easing amid a slowing labor market. Simultaneously, significant geopolitical and corporate headwinds are emerging. Nvidia (NVDA) shares fell 1.5% in premarket trading on a report that Beijing has instructed major Chinese tech firms to halt purchases of its specialized AI chips, effectively banning tens of thousands of orders and signaling a material escalation in trade restrictions. The consumer sector is showing divergent trends; while General Mills (GIS) beat sales estimates, its stock slipped after it warned of a challenging consumer backdrop. Conversely, a drop in 30-year mortgage rates to their lowest point since October 2024 spurred a nearly 60% spike in refinancing applications, suggesting some relief for household finances.

Key Decisions for Investors

• Given that a 25 basis point rate cut is fully priced in, investors should focus on the Fed's 'dot-plot' and Powell's commentary, as a more hawkish-than-expected outlook on the pace of future easing could trigger a market pullback.
• The reported Chinese ban on Nvidia (NVDA) chips represents a significant revenue and geopolitical headwind, warranting a risk reassessment for positions in NVDA and other semiconductor firms with high exposure to China.
• The conflicting signals from General Mills' (GIS) cautious outlook and the surge in mortgage refinancing suggest a bifurcated consumer environment; investors should remain selective in consumer staples and consider opportunities in interest-rate-sensitive sectors like housing.
• Monitor the upcoming discussion between President Trump and Chinese President Xi on Friday, as any new developments on trade policy could introduce significant volatility for multinational corporations, particularly in the tech sector.