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Briefing.com Summary:
*Today's FOMC decision is expected to have the semblance of a "hawkish cut."
*Oracle will report its quarterly results after the close.
*The Q3 Employment Cost Index was a step in the right direction for inflation.
In case you hadn't heard, there is an FOMC meeting today that will culminate at 2:00 p.m. ET with a decision on the policy rate and updated economic and policy rate projections by Fed members. Then, Fed Chair Powell will step to the podium at 2:30 p.m. ET to try to explain it all and what it means at his press conference.
The market has designs, though, on what it expects from the Fed today. Specifically, it expects a non-unanimous decision to cut the target range for the fed funds rate by 25 basis points to 3.50-3.75% and for Fed Chair Powell and/or the policy directive to signal that the Fed is unlikely to cut rates again soon.
That approach has been dubbed a "hawkish cut," and it is partly why the stock market looks to be in a digestion phase, defined by a lateral move within a wider range. The S&P 500 is currently near the top end of that trading range, which means it is also close to an all-time high.
What the Fed has to say today, then, could make it look either like Scrooge or the Ghost of Christmas Present. To be sure, the market will inform us as to which character it sees today.
At the moment, it doesn't see much to get worked up about. The S&P 500 futures are flat and are trading in line with fair value, the Nasdaq 100 futures are down 19 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down one point and are trading in line with fair value.
The flattish disposition is representative of a market that is waiting on the Fed, keeping an eye on Treasury yields that have risen ahead of the FOMC decision and the specter of Oracle's (ORCL) earnings report after the close.
The 2-yr note yield, which is more sensitive to changes in the fed funds rate, is at 3.62%, up 12 basis points for the month; meanwhile, the 10-yr note yield, at 4.20%, is up 19 basis points for the month.
There wasn't much reaction to the Q3 Employment Cost Index, but the Treasury market found a modest bid after its release. The reason being is that compensation costs for civilian workers increased 0.8% (Briefing.com consensus: 0.9%), seasonally adjusted, for the 3-month period ending in September 2025. That was a moderation from the 0.9% increase registered in the second quarter.
The key takeaway from the report is that it was an inflation-friendly report, evidenced by wages and salaries decelerating on a year-over-year basis for civilian workers (3.5% vs 3.9% a year ago), private industry (3.6% vs 3.8% a year ago), and state and local government workers (3.5% vs 4.6% a year ago).
What matters most today, though, is what the key takeaway will be from the Fed. In a certain respect, then, today's session won't really begin until 2:00 p.m. ET.
