Stock Market Update

Equity futures point to a slightly lower open after a flattish session yesterday as market participants eagerly await the FOMC decision this afternoon.

The market has fully priced in a 25-basis-point rate cut at this September meeting for some time, but the updated Summary of Economic Projections and dot plot will influence the market's expectations for future rate cuts this year. 

Investors will also be focused on price action in response to today's developments. A deviation from the market's current estimate of three 25-basis-point rate cuts would likely be taken as a headwind, but a more dovish sentiment could also trigger a "sell the news" reaction given the market sits at record high levels. 

The market will also receive August housing starts (Briefing.com consensus: 1375K) and building permits (Briefing.com consensus: 1370K) data at 8:30 a.m. ET.

The MBA Mortgage Applications Index for the week ended September 13 increased 29.7%, from a prior increase of 9.2%.

Corporate headlines are relatively quiet ahead of today's Fed happenings, with just a small batch of companies reporting earnings. 

In corporate news:

• A coalition of pharmaceutical companies has pledged to invest $350 billion in the U.S. in response to President Trump's tariff threats. 
• Apple (AAPL 237.80, -0.35, -0.2%) iPhone sales declined in China ahead of the iPhone 17 introduction, according to The Financial Times. 
• General Mills (GIS 49.14, -0.42, -0.9%) beat EPS expectations by $0.05, reported revenues in-line, and reaffirmed its FY26 guidance. 
• China advised its technology companies to stop purchasing NVIDIA (NVDA 172.30, -2.58, -1.5%) chips, according to The Financial Times. 
• StubHub Holdings (STUB) prices 34,042,553 share IPO at $23.50, at the midpoint of the $22-25 expected range.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note with Japan's Nikkei (-0.3%), Hong Kong's Hang Seng (+1.8%), and South Korea's Kospi (-1.1%) hitting fresh highs for the year. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: +1.7%, China's Shanghai Composite: +0.4%, India's Sensex: +0.4%, South Korea's Kospi: -1.1%, Australia's ASX All Ordinaries: -0.6%.

In news:

• Baidu had a strong showing in Hong Kong on expectations for AI growth. China's government announced a series of measures aimed at increasing consumption through promotional activities.
• Japan's trade balance report for August showed that exports to the U.S. fell 13% month-over-month.
• Japan sold 20-yr bonds to strong demand.

In economic data:

• Japan's August trade deficit JPY242.5 bln (expected deficit of JPY513.6 bln; prior deficit of JPY118.4 bln). August Imports -5.2% yr/yr (expected -4.2%; last -7.4%) and Exports -0.1% yr/yr (expected -1.9%; last -2.6%)
• Singapore's August trade surplus $5.078 bln (last surplus of $6.351 bln). August non-oil exports -8.9% m/m (last -6.0%); -11.3% yr/yr (expected 1.0%; last -4.7%). Q2 Unemployment Rate 2.0% (expected 2.1%; last 2.1%)
• Australia's August MI Leading Index -0.1% m/m (last 0.1%)
• New Zealand's Q3 Westpac Consumer Sentiment 90.9 (last 91.2). Q2 Current Account -3.7% of GDP (last -5.7% of GDP)

Major European indices trade near their flat lines while Italy's MIB (-1.2%) underperforms, deepening its pullback from its best level of the year. STOXX Europe 600: -0.1%, Germany's DAX: flat, U.K.'s FTSE 100: +0.2%, France's CAC 40: -0.3%, Italy's FTSE MIB: -1.2%, Spain's IBEX 35: flat.

In news:

• A hot CPI reading from the U.K. kept the year-over-year CPI growth rate at 3.8%, which will weigh on rate cut expectations.
• In addition, the U.K.'s budget office is expected to reduce its productivity growth estimates ahead of the fall budget.
• Meanwhile, the eurozone's CPI was up 2.0% year-over-year in August, matching the European Central Bank's target.
• Germany is expected to announce that its borrowing in Q4 will be increased by EUR15 bln.

In economic data:

• Eurozone's August CPI 0.1% m/m (expected 0.2%; last 0.0%); 2.0% yr/yr (expected 2.1%; last 2.0%). August Core CPI 0.3% m/m, as expected (last -0.2%); 2.3% yr/yr, as expected (last 2.3%)
• U.K.'s August CPI 0.3% m/m, as expected (last 0.1%); 3.8% yr/yr, as expected (last 3.8%). August Core CPI 0.3% m/m (last 0.2%); 3.6% yr/yr (expected 3.7%; last 3.8%). August RPI 0.4% m/m (expected 0.5%: last 0.4%); 4.6% yr/yr (expected 4.7%; last 4.8%)