U.S. stock futures hold steady, focus on interest rate cut By Investing.com

Investing.com– U.S. stock index futures were steady in Asian trade on Friday, as investors held on to expectations of lower interest rates ahead of a Federal Reserve meeting that could herald a wider easing cycle .

Wall Street indexes largely shrugged off some strong readings on consumer and producer inflation this week, with tech stocks rising on renewed optimism about artificial intelligence weighing on earnings.

US stocks also overcame some political uncertainty after a heated presidential debate between Donald Trump and Kamala Harris, in which analysts saw Harris gaining an edge over the Republican nominee.

were steady at 5,603.25 points, while settling at 19,444.00 points by 21:58 ET (01:58 GMT). increased by 0.1% to 41,177.0 points.

Fed prepares to cut rates, markets divided between 25 or 50 bps decision

The central bank is expected to cut interest rates when it does, although investors are divided on whether it will cut rates by 25 or 50 basis points.

While choppy inflation data released this week saw expectations shift to a 25bps cut, some weak labor market data saw bets on a 50bps cut come back into play.

Traders were seen pricing in a 58% chance for a 25bps chance and a 42% chance for a 50bps discount.

Next week’s decision will likely mark the start of an easing cycle for the Fed, with the central bank expected to cut rates by at least 100 bps this year. But investors were now looking for more concrete signs of that, given that while Fed officials have signaled potential interest rate cuts, they have given no clear indication of the extent of any planned cuts.

Wall St buoyed by tech gains

Still, the prospect of lower rates kept some risk appetite at bay as the dollar and Treasury yields retreated.

Wall Street indices were also supported by gains in technology stocks as strong earnings and guidance from Oracle Corporation (NYSE: ), along with positive demand signals from NVIDIA Corporation (NASDAQ: ), renewed optimism about artificial intelligence.

An element of bargain buying also helped tech after the sector was sold off strongly in the past month.

It rose 0.8 percent to 5,595.8 points, while it rose 1 percent to 17,595.68 points. It increased by 0.6% to 41,096.77 points.

Wall Street indexes recovered from last week’s heavy losses, although they were still trading well below record highs hit earlier in the year.