Closing Recap

U.S. stock futures indicate a mixed and quiet open as investors adopt a cautious stance ahead of the Federal Reserve’s pivotal two-day policy meeting this week; global markets were mostly higher, gold is easing from record highs, oil is up slightly, and the U.S. dollar is attempting to stabilize after recent weakness. In the currency markets, major pairs like the EUR/USD are trading in a narrow range as the market awaits guidance from the Fed, while the Japanese Yen is seeing some minor volatility on political uncertainty and shifting Bank of Japan expectations. 

Key Takeaways 

• Futures Mixed Ahead of Fed Meeting: Equities are poised for a cautious start to a week dominated by the FOMC’s interest rate decision on Wednesday. 
• Fed Rate Cut Widely Expected: Markets have almost fully priced in a 25-basis-point rate cut, with the focus now on the Fed’s statement and Chair Powell’s commentary for clues on future easing. 
• Global Markets Mostly Higher: Asian markets were predominantly positive, led by a strong rally in Japan, while European markets are also consolidating recent gains. 
• Gold Eases from Record Highs: Gold prices are pulling back slightly on profit-taking after hitting all-time highs last week, but the underlying bullish trend remains intact. 
• Oil Gains on Geopolitical Risk: Crude oil prices are higher, supported by ongoing tensions in the Middle East and the potential for more sanctions on Russian crude. 
• The U.S. dollar is attempting to stabilize after a sharp decline last week, with the DXY holding above 97.55, though the currency’s outlook remains pressured by dovish Fed expectations. 
• Bitcoin is extending recent gains, trading above $116,000 as renewed hopes for a U.S. rate cut this week bolster risk appetite in the crypto space. 
• Trade Talks in Focus: U.S. and Chinese officials are meeting in Madrid to discuss tariffs and the status of TikTok, with the current tariff truce set to expire in November. 

Market Overview 

U.S. equity markets are set to begin the week on a quiet and cautious note, with futures indicating a mixed open as investors turn their full attention to the Federal Reserve’s highly anticipated two-day policy meeting, which kicks off tomorrow. After a mixed close on Wall Street on Friday, global markets are showing a tentative tone. Asian indices were mostly higher overnight, shrugging off Friday’s weak U.S. finish as hopes for a September Fed rate cut continue to provide a supportive backdrop. 

Index	Up/Down	% Change	Last
DJ Industrials	-273.78	-0.0059	45834.22
S&P 500	-3.18	-0.0005	6584.29
Nasdaq	98.03	0.0044	22141.1
FTSE 100	-2.86	-0.03%	9,280.43
DAX	72.12	0.30%	23,770.27

The Federal Reserve is widely expected to deliver a 25-basis-point interest rate cut on Wednesday, a move that the market has almost fully priced in following a series of softer-than-expected U.S. labor market reports. The key for investors will be the Fed’s accompanying statement and Chairman Jerome Powell’s press conference, which will be scrutinized for signals about the potential for further easing later this year. Some analysts are warning that the Fed could deliver a “hawkish cut,” tempering expectations for a prolonged easing cycle, which could introduce volatility. 

In the background, trade talks between the U.S. and China are ongoing in Madrid, with tariffs and the future of TikTok on the agenda. Geopolitical tensions in the Middle East also remain a factor, providing some support for oil prices. With a very light economic calendar today, trading is likely to remain subdued as market participants position themselves ahead of the mid-week central bank fireworks.

Economic Calendar

The U.S. economic calendar is very light today. The FOMC rate decision on Wednesday is the main event of the week. Today’s risk events releases: 

• NY Empire State Manufacturing PMI (U.S.) 
• Canadian Manufacturing & Wholesale Sales m/m (Canada) 
• ECB’s Schnabel Speech ECB 
• President Lagarde Speech

Key This Week: 

• FOMC Interest Rate Decision & Press Conference (Wednesday) 
• UK GDP, Inflation, and Retail Sales data. 
• Bank of England (BoE) Rate Decision (Thursday).

 Economic Data: 

• U.S. Prelim UoM Consumer Sentiment (Sep – Released Friday): 55.4 (vs. 58.2 est.). 
• U.S. Prelim UoM Inflation Expectations (Sep – Released Friday): 4.8% (Matching prior).

Commodities, Treasuries and Currencies 

Gold prices are easing slightly from the record highs hit last week, with spot gold down about -0.12% at $3,681.20 per ounce. This comes as the latest Commitments of Traders (COT) report shows both large speculators and asset managers have been increasing their net-long positions, signaling strong underlying bullish conviction.The pullback appears to be minor profit-taking and consolidation ahead of the Fed meeting. Crude oil prices are trading modestly higher, with WTI up 0.64% to $63.09/bbl and Brent up 0.57% to $67.37/bbl, supported by ongoing geopolitical tensions. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.34	USD/bbl	63.03
Brent	0.32	USD/bbl	67.31
Gold	-13.2	USD/oz	3673.2
Silver	-0.115	USD/oz	42.715
EUR/USD	0.0005	USD	1.174
USD/JPY	-0.23	JPY	147.44
10-Year Note	0.008	%	0.04078
Dollar Index	0.01	Points	97.56

In the currency markets, the U.S. Dollar Index (DXY) is attempting to find a floor, holding steady around 97.56 after last week’s sharp decline. The EUR/USD pair is consolidating around 1.1725 in a narrow range. The British Pound is also flat ahead of a heavy UK data week. The Japanese Yen has weakened slightly against the dollar as political uncertainty in Japan continues to be a factor. U.S. Treasury yields are modestly higher in quiet trading, with the 10-year yield at 4.078%. Bitcoin is extending recent gains, trading up 0.37% near $116,110.

The latest COT report provides a deeper look into speculative positioning: net-long exposure to the Japanese Yen (JPY) saw a significant jump, while bulls also added to their net-long positions in the Euro (EUR). In contrast, net-short positions on the British Pound (GBP) increased slightly, and net-short exposure to the Australian Dollar (AUD) was reduced.

Looking Ahead 

The market will be almost entirely focused on the Federal Reserve’s two-day meeting, which begins tomorrow and concludes with the policy statement and Chair Powell’s press conference on Wednesday afternoon. While a 25-basis-point rate cut is widely expected, the Fed’s economic projections and Powell’s tone regarding the future path of monetary policy will be the most critical drivers of market sentiment for the remainder of the week and beyond. In the meantime, any headlines from the ongoing U.S.-China trade talks could also inject volatility.