Stock index futures rise as traders await key Fed decision

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Wall Street opened in the green on Monday, as traders turned their focus to the key Federal Reserve meeting slated for later in the week, while Tesla rose after CEO Elon Musk snapped up some shares of the company.

S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) +0.4%, the Dow (DJI [https://seekingalpha.com/symbol/DJI]) +0.1%, and the Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) +0.6%.

The 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) fell 2 basis points to 4.04%. The 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) was down 2 basis points to 3.54%.

The Empire State Manufacturing Index tumbled [https://seekingalpha.com/news/4494839-empire-state-manufacturing-index-plunges-to--87-in-september] to -8.7 in September, vs. 4.30 expected, from 11.9 in August.

Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) rose 7% in early trade as Musk snapped [https://seekingalpha.com/news/4494763-tesla-rallies-to-an-eight-month-high-after-elon-musk-buys-more-than-1b-worth-of-shares] up 2,568,732 shares of the company's stock.

Wall Street's major averages closed mixed on Friday, with the Nasdaq Composite closing at new highs every day of the week, while the Dow retreated from the 46K level.

"Clearly this week is all about the FOMC conclusion on Wednesday and the likely continuation of the U.S. rate-cutting cycle that started exactly a year ago and got as far as one 50 bps and two 25 bps cuts, with the last being 9 months ago now," Deutsche Bank's Jim Reid said.

The Fed is expected to announce its decision on Wednesday, and odds of a 25 basis point are at 94.2%, according to CME FedWatch.

"Jerome Powell’s discussion of the labor market is likely to sound materially different compared to the July meeting and closer to his communications at Jackson Hole, but he could still allude to some of the slowdown in job gains reflecting supply-side dynamics driven by immigration policies. His tone on inflation will likely be more dovish, as, although August CPI was somewhat hotter than expected, the details from PPI and CPI point to a more subdued reading on core PCE later this month, likely in the 20-24 bps range, according to our economist," Reid added.

Investors await this week’s Fed meeting, less for the decision (a cut is expected) and more for signals about the Fed’s worries for the future, UBS' Paul Donovan said.

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