US futures

Dow future 0.24% at 41481

S&P futures -0.08% at 5619

Nasdaq futures -0.5% at 19415

In Europe

FTSE -0.03% at 8268

Dax -0.28% at 18633

• US stocks mixed after gains last week
• Traders price in a 50% chance of a 50 basis point rate cut
• USD/JPY falls below 140.00
• Oil rises as supply concerns offset weak China data

Stocks mixed as investors weigh up rate cut expectations

US futures point to a mixed start ahead of the open on Monday after strong gains last week and as traders try to anticipate the Federal Reserve's move at this week's monetary policy meeting.

The S&P 500 gained 4% last week and the Nasdaq 100 almost 6%, as risk sentiment recovered from earlier in the month and as investors weighed up whether the Fed would cut rates by 25 or 50 basis points this week.

The market is pricing in a 50/50 probability of an outsized rate cut by the Fed ahead of the 2-day meeting, which kicks off tomorrow. There are arguments for both a 50 basis points and a 25 basis point cut, but given that the pricing remains uncertain, whatever the Fed decides, it will cause volatility.

Along with the rate decision, the Feds' dot plot will be in focus, with the market expecting 100 basis points worth of cuts this year.

As far as data is concerned, the NY Empire State manufacturing index unexpectedly rebounded in September, rising to 11.5, up from -4.7 and defying expectations of -3.9.

Ahead of the Fed rate decision on Wednesday, US retail sales figures are due tomorrow.

Corporate news

Tesla is rising after the EV manufacturer posted a 1.2% increase in registrations in July helped by 5175 deliveries of Cybertrucks.

Apple is falling over 2% pre-market after initial demand for the iPhone 16 series appears to be underwhelming. According to analysts and based on supply chain survey data, sales for all four iPhone 16 models reached around 37 million units in the first weekend after Apple began accepting pre-orders. This is down 13% compared to the first weekend of iPhone 15 sales last year.

Intel is set to open higher after Bloomberg reported the chipmaker has officially qualified to receive as much as $3.5 billion in federal grants to make semiconductors for the US Department of Defence.

S&P 500 forecast – technical analysis.

The S&P 500 has extended its recovery from the 5400 low, rising above 5500 and 5550. The price tests the multi-month rising trendline resistance dating back to November last year. Supported by the RSI over 50, buyers will look to rise above here to test 5650, the September high, ahead of 5670, the ATH. A break below 5550 and 5500 could negate the near-term uptrend. While a move below 5400 is needed to create a lower low.

FX markets – USD falls, USD/JPY falls

The USD falls, extending losses from last week as the market sees a 50/50 basis probability of an outsized rate cut by the Federal Reserve this week.

EUR/USD has risen to 1.11 after the ECB cut interest rates by 25 basis points last week, downwardly revised growth forecasts, and highlighted ongoing upside risks to inflation. The weaker USD is driving moves in the pair.

USD/JPY has fallen below 140 to a fresh 8-month low ahead of a key week for central banks where the Federal Reserve is expected to cut rates and where the Bank of Japan could adopt her more hawkish starts preparing for rate cuts further in the year.

Oil rises as supply concerns offset weak China data

Oil prices are inching higher after increasing 1% in the previous week, snapping a four-week losing run as the ongoing disruption to US Gulf oil infrastructure offset concerns over the demand outlook in China. The mood is also cautious ahead of the Federal Reserve interest rate decision.

Data over the weekend showed that Chinese industrial output growth slowed to a five-month low in August while retail sales and new home prices weakened further. Oil refinery output also dropped for a fifth month as weak fuel demand and export margins curbed production. The data highlighted ongoing concerns over the health of the Chinese economy and, therefore, the demand for oil outlook.

Meanwhile, these worries are being offset by supply concerns, as nearly 1/5 of crude oil production and 28% of natural gas output in the Gulf of Mexico remained offline after Hurricane Francine.