Futures for the index advanced 0.3%, with Oracle Corp. rising 4.6% in premarket trading. S&P 500 contracts climbed 0.2% after the benchmark powered through the 6,600 mark on Monday. Europe’s Stoxx 600 fell 0.3%. MSCI’s gauge for Asian shares hit a record and is poised for its best streak in nearly five years.
Stock bulls are riding high ahead of the Fed’s widely expected 25-basis-point cut on Wednesday, the first move in a policy easing round projected to run into 2026. Rate-sensitive tech shares have led the charge in the post-Liberation Day rebound, fuelled by enthusiasm over the vast earnings potential tied to artificial intelligence.
“Capex and profit forecasts linked to AI are overwhelming,” said Thomas Brenier, head of equities at Lazard Freres Gestion. “Look at Oracle, it seems that the sky is the limit.”
Expectations of aggressive Fed rate cuts drove the dollar toward its weakest level since July. The euro climbed 0.5%, nearing its highest level since 2021. The divergence reflects the Fed’s shift toward easing, in sharp contrast with the European Central Bank, where policymakers have signalled an end to their own loosening cycle.
Later on Tuesday, traders are set for a final read on the American consumer. Retail sales data for August are forecast to show a 0.2% increase, following stronger advances in the previous two months. With the jobs market softening and prices rising, questions remain over how long consumers will keep spending freely.
“In the session ahead, we navigate US retail sales and that poses a degree of risk to markets,” wrote Chris Weston, head of research at Pepperstone Group. “However, with the Fed meeting looming large in the following session, it will likely take an outsized surprise in retail sales to really move the dial on risk.”
US Treasuries were little changed, with the 10-year yield at 4.04%. US government bonds have outpaced global peers this year, delivering a 5.8% return as expectations for policy easing reversed widely held bearish views.
Meanwhile, the tensions between the Fed and Trump administration escalated Monday. An appeals court temporarily halted the effort to oust Governor Lisa Cook, while the Senate separately approved Trump’s economic adviser Stephen Miran for a seat on the board.
