U.S. stock futures rose on Tuesday, with technology companies leading the way as they wait for new retail sales data and the start of a Federal Reserve meeting crucial for a rate cut.
Dow Jones Industrial Average futures () rose about 0.3%, hitting a record high for the blue chip index. S&P 500 futures () also rose 0.3%, while contracts on the tech-heavy Nasdaq 100 () rose 0.5%.
Stocks are preparing for gains as the chances of a 0.5% Fed rate cut increase crawl higherwith just one day to go before the monetary policy decision is taken. The central bank’s two-day meeting, which starts on Tuesday, is expected to result in the first interest rate cut since early 2020.
Investors are looking to August retail sales figures to be released later to gain insight into consumer health and the economy, the last piece of data that could factor into the Fed’s thinking. Weaker-than-expected interest rates could reinforce bets on a substantial rate cut rather than a quarter-point move.
Read more: Fed Predictions for 2024: What Experts Say About the Possibility of a Rate Cut
Currently, the debate on the interest rate path focuses on the likelihood that a larger cut could occur. At the same time, some on Wall Street suggest the smaller move could also disappoint and raise concerns.
As of Tuesday, traders see odds of 65% on a 50 basis point rate cut, compared to 62% a day ago. The probability of a 25 basis point cut is 35% CME FedWatch tool.
Meanwhile, shares of Intel (INTC) soared after the foundry secured Amazon a billion-dollar customer for AI chips. Microsoft’s (MSFT) new plan to buy back $60 billion in shares and a 10% dividend increase also helped revive confidence in battered technology stocks.