S&P Futures Gain as Oil Retreats, Fed Rate Decision in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.23% this morning as a pullback in oil prices helped stabilize sentiment ahead of the Federal Reserve’s interest-rate decision, which is expected to shape the market’s next move.

The price of WTI crude dropped over -1% on Wednesday after data from the American Petroleum Institute showed that U.S. inventories increased by 7.1 million barrels last week, easing some supply concerns. Treasuries edged lower, with the benchmark 10-year yield falling one basis point to 5.00%.

In yesterday’s trading session, Wall Street’s major indexes ended in the red as rising oil prices pushed Treasury yields to multi-year highs. Cryptocurrency-exposed stocks slid as Bitcoin dropped after the Clarity Act failed to advance in the Senate, with Coinbase Global (COIN) plunging over -10% to lead losers in the S&P 500 and Strategy (MSTR) falling more than -5%. Also, Axon Enterprise (AXON) slumped over -9% and was the top percentage loser on the Nasdaq 100 after disclosing a proposed $1 billion offering of convertible senior notes due in 2031. In addition, Enova International (ENVA) cratered more than -23% after the financial services company withdrew regulatory applications related to its planned acquisition of Grasshopper Bancorp. On the bullish side, chip and AI infrastructure stocks advanced, with Qualcomm (QCOM) climbing over +4% to lead gainers in the Nasdaq 100 and Advanced Micro Devices (AMD) rising more than +2%.

A report from the New York Fed released on Tuesday showed that the September Empire State manufacturing index fell to 7.6 from a four-year high of 20.6 in August, weaker than expectations of 14.8.

Today, all eyes are focused on the Federal Reserve’s monetary policy decision. U.S. rate futures have priced in a 92.5% probability that the Federal Open Market Committee will raise its benchmark policy rate by a quarter point from the current 3.50%-3.75% range. Whenever the probability of a rate hike has been that high, the Fed has followed through, according to Bloomberg-compiled data dating back to 2008. Market participants will be closely watching Fed Chairman Kevin Warsh’s post-decision press conference for clues on whether, if the Fed does raise rates, the move would mark the start of a broader tightening cycle or prove to be a one-off. Attention will also be on the Fed’s updated projections for the economy and its “dot plot” interest-rate forecasts.

“If the Fed follows the futures market and hikes rates, our sense is that stocks are likely to see downward pressure over the near-term. However, we’ve found that over a longer time horizon — six to 12 months after the first rate hike — stocks typically recover and push into positive territory,” said Chris Senyek at Wolfe Research.

Hours before the Fed decision, investors will turn to U.S. retail sales data. Economists forecast that retail sales will show a +0.8% m/m increase in August after a -0.6% m/m drop in July. Core retail sales, which exclude motor vehicles and parts, are projected to rise +0.5% m/m in August after falling -0.3% m/m in July.

The U.S. import and export price indexes will also be released today. Economists project the import price index to rise +0.4% m/m and the export price index to rise +0.5% m/m in August, compared with the previous month’s figures of -0.4% m/m and -1.3% m/m, respectively.

The EIA’s weekly crude oil inventories report will be released today as well. Economists expect crude oil inventories to decline by 1.6 million barrels in the week ended September 11th, compared with a decrease of 0.4 million barrels in the prior week.

On the earnings front, homebuilder Lennar (LEN) is set to report its FQ3 results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.00%, down -0.16%.

The Euro Stoxx 50 Index is up +0.27% this morning as a dip in oil prices brought some relief to investors, though gains were limited amid caution ahead of the Fed’s rate decision. Mining stocks led the gains on Wednesday, with Pan African Resources (PAF.LN) rising over +5% after reporting a surge in full-year revenue. Bank stocks also climbed, rebounding from yesterday’s slump. In addition, chip-related stocks advanced. At the same time, automobile stocks underperformed. Final data released on Wednesday confirmed that Italy’s annual inflation rate picked up to +3.3% in August. Separate data showed that the U.K.’s annual inflation rate accelerated to +3.1% in August, but was in line with expectations. In addition, the European Central Bank said its updated wage tracker pointed to a modest pickup in negotiated wage growth in the first half of 2027 following broadly stable increases for the remainder of this year. Meanwhile, Eurozone government bond yields rose on Wednesday as traders ramped up bets on further ECB rate hikes. Investor attention now shifts to the Fed’s interest-rate decision due later in the day. In other corporate news, Soitec (SOI.FP) jumped over +12% after JPMorgan upgraded the stock to Overweight from Neutral.

U.K. CPI, U.K. Core CPI, Italy’s CPI, and Eurozone’s Industrial Production data were released today.

U.K. August CPI rose +0.5% m/m and +3.1% y/y, in line with expectations.

U.K. August Core CPI rose +0.3% m/m and +2.6% y/y, in line with expectations.

The Italian August CPI rose +0.5% m/m and +3.3% y/y, in line with expectations.

Eurozone’s July Industrial Production fell -0.1% m/m and was unchanged y/y, stronger than expectations of -0.2% m/m and -0.3% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.71%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.69%.

China’s Shanghai Composite Index closed higher today, led by gains in the tech sector. Semiconductor and other AI-related stocks climbed on Wednesday, helping the benchmark index snap a four-session losing streak. The gains were partly fueled by commentary in the ruling Communist Party’s official People’s Daily that AI is not a “monopoly of great powers” and that the U.S. should work with China to manage risks and foster a non-discriminatory development environment. Meanwhile, U.S. Treasury Secretary Scott Bessent said on Tuesday that he would meet with Chinese Vice Premier He Lifeng this weekend ahead of next week’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping. Elsewhere, People’s Bank of China Governor Pan Gongsheng said on Wednesday that slower loan growth in China is becoming the new normal as weakness in the property and local government sectors reduces credit demand faster than emerging industries can offset the shortfall. In corporate news, S.F. Holding fell over -1% after announcing plans to raise nearly $1.50 billion through a yuan-denominated bond offering.

Japan’s Nikkei 225 Stock Index closed higher today, snapping a three-session losing streak as a pause in oil’s rally provided some relief to investors. Energy stocks, which followed yesterday’s advance in crude prices, and chemical shares led the gains on Wednesday. Electronics stocks also gained. Data released on Wednesday showed that Japan’s imports rose at the fastest pace in nearly four years in August as higher oil prices drove up energy costs, while exports grew for a 12th straight month on robust semiconductor-related demand. As a result, Japan posted its widest trade deficit in seven months in August. Separate data showed that Japan’s monthly core machinery orders, a gauge of future business investment, fell more than expected in July. Meanwhile, Japanese government bond yields fell on Wednesday as a retreat in oil prices eased inflation concerns. Investor focus for the remainder of the week is on the Bank of Japan’s policy decision. The BOJ is widely expected to raise its benchmark rate by 25 basis points to 1.25%, the highest level since 1995, after a series of supportive economic reports. Market participants will scrutinize the BOJ’s tone and guidance for clues on whether it will accelerate the pace of tightening or maintain a gradual approach. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.30% to 28.44.

The Japanese August Trade Balance stood at -1,105.6 billion yen, weaker than expectations of -1,052.6 billion yen.

The Japanese August Exports rose +19.3% y/y, stronger than expectations of +18.2% y/y.

The Japanese August Imports rose +28.0% y/y, stronger than expectations of +26.3% y/y.

The Japanese July Core Machinery Orders fell -3.7% m/m and rose +11.2% y/y, weaker than expectations of -1.2% m/m and +15.3% y/y.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks advanced in pre-market trading. Marvell Technology (MRVL) was up over +2%, while Advanced Micro Devices (AMD) and Arm Holdings (ARM) were up more than +1%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - September 16th

Lennar (LEN), Aeluma (ALMU).

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.