Stocks and Bonds Halt Slide Before Fed Rate Call: Markets Wrap
(Bloomberg) — Stocks and bonds are finding relief after days of selling as traders wait for the Federal Reserve’s latest interest-rate decision and updated projections before placing bets on where markets will head next.
The S&P 500 was poised to open higher for the first time this week as index futures rose 0.2%. Treasuries were little changed, leaving the 10-year yield at 5.00%. A dip in oil prices helped steady sentiment, with Brent crude falling below $108 a barrel. Nasdaq 100 contracts climbed 0.3%. The dollar barely budged, while Bitcoin extend losses to around $75,500.
The Fed is expected to lift rates for the first time since 2023, with policymakers increasingly doubtful that inflation will cool sufficiently without some help. Spiking oil prices have added to fears that price pressures are accelerating, contributing to a rise in bond yields to the highest in decades and weighing on stocks.
Money markets see a more than 90% chance of a quarter-point hike on Wednesday, with another move fully expected by December.
“The Federal Reserve has little choice but to hike rates on Wednesday, especially since the bond market has been signaling for weeks that higher rates are warranted,” said Carol Schleif at BMO Wealth Management. “The stock market would be disappointed if the Fed didn’t hike.”
The drop in oil prices came as a US industry report pointed to a rise in stockpiles. A supply-driven rally of more than 4% in Brent over the past two days pushed the benchmark’s relative strength index above 70, a level that can signal a pullback and suggest gains are overdone.
Retail sales data before the US market open will likely give the Fed little reason to worry about demand, according to Bloomberg Economics. The August report is expected to show a strong rebound in nominal sales, with higher prices and seasonal effects adding to the strength, wrote economist Eliza Winger.
What Bloomberg Strategists Say:
“Longer-dated yields are already at the highest in years. While traders who have been bearish on duration will be inclined to trim positions today, any inflection point in the narrative is dependent on the central banks demonstrating resolve to quell inflation and restoring some credibility.”
— Ven Ram, cross-asset strategist. For the full note, click here.
Corporate News:
SK Hynix Inc. has struck an agreement with its union to pay out half of all profit-sharing bonuses in cash, resolving a dispute that threatened to disrupt production at the world’s second-biggest memory chipmaker. OpenAI is holding early talks with investors about a fresh funding round that would value the ChatGPT creator at more than $1.2 trillion ahead of an initial public offering. Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg said AI labs should rely on independent evaluators and advisers to ensure that models are safe. JPMorgan Chase & Co. forecast third-quarter gains for trading revenue and investment-banking fees, a stark contrast from Bank of America Corp.’s warning earlier this week. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.3% as of 9:21 a.m. London time S&P 500 futures rose 0.2% Nasdaq 100 futures rose 0.3% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.6% The MSCI Emerging Markets Index rose 0.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1547 The Japanese yen was little changed at 155.04 per dollar The offshore yuan was little changed at 6.7073 per dollar The British pound was little changed at $1.3471 Cryptocurrencies
Bitcoin fell 0.6% to $75,440.67 Ether fell 0.7% to $2,388.09 Bonds
The yield on 10-year Treasuries was little changed at 5.00% Germany’s 10-year yield advanced one basis point to 3.55% Britain’s 10-year yield declined one basis point to 5.37% Commodities
Brent crude fell 0.7% to $108.03 a barrel Spot gold rose 1% to $4,333.12 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher.
©2026 Bloomberg L.P.
