US OPEN: FED in the spotlight. Will policy easing stimulate the stock market?

Wall Street is almost unanimously expecting the Federal Reserve to cut interest rates by 0.25 percentage points at the upcoming meeting. Investors are also counting on Fed Chair Jerome Powell to signal further rate cuts aimed at supporting the weakened stock market and stabilizing economic growth amid rising global risks.

In recent weeks, U.S. stock indices, including the S&P 500, have reached historic highs; however, tensions related to rising inflation and geopolitical uncertainty continue to pressure investors. Analysts predict that the S&P 500 index may rise by about 0.7% on the day of the Fed’s announcement, though they warn that the market is particularly sensitive to any signals from the Fed regarding future monetary policy.

It is worth emphasizing that Fed officials will update their forecasts for interest rates and economic growth prospects during the meeting. Jerome Powell’s tone will be crucial. A more hawkish stance, suggesting maintaining or even returning to rate hikes, could trigger a sharp correction in equity and bond markets. Conversely, a clear signal of continued monetary easing will be perceived as support for the market but may raise concerns about further inflation risks.

Current market forecasts indicate that over the next twelve months, interest rates may be cut by a total of about 150 basis points, mainly through several staged cuts of 25 basis points each. However, the situation remains volatile and depends on incoming economic data, so investors are prepared for unexpected twists.

Dovish monetary policy expectations are supporting gains in smaller companies. Today’s capital reallocation is minor, but if the Fed meets the market’s dovish expectations, more decisive moves could follow. Lower interest rates will mainly benefit smaller businesses, given their higher reliance on debt markets and lower financial liquidity.

US500 (H1 interval)

Contracts on the S&P 500 index (US500) today remain around yesterday’s closing level from the U.S. session. The market is showing patience and calm, waiting for key information to be released during today’s session. The main event is the Federal Reserve’s interest rate decision scheduled for midday.

Source: xStation5

Company news:

• Workday (WDAY.US) rises 9% after Guggenheim upgraded its recommendation, highlighting improvements in key areas of the company’s operations. Additionally, the company’s $4 billion share buyback program and the involvement of activist investor Elliott Management, holding $2 billion worth of shares, positively influence the stock. Analysts appreciate Workday’s progress in developing its cloud platform, especially in artificial intelligence, and raised revenue forecasts for 2026 by 14%.

• Rithm Capital (RITM.US) gains 3.5% following news of the planned acquisition of Paramount Group (PGRE) for $1.6 billion. The deal includes a portfolio of office properties located in New York and San Francisco. Paramount, owner of prestigious buildings in these cities, had been seeking a buyer for some time, with firms such as Blackstone participating in the sale process.

• Manchester United (MANU.US) drops 6% after reporting results for the first quarter of fiscal year 2025, showing a revenue decline of 8.9% to £143.1 million. Nonetheless, the club recorded a net profit of £1.4 million, improving compared to a loss the previous year. Financial stability is also supported by a 1.7% increase in EBITDA. Analysts point out the decline in broadcasting and matchday revenues, partly due to the team playing in the Europa League instead of the Champions League. The club confirmed full-year forecasts, expecting revenues between £650-670 million and adjusted EBITDA profit between £145 and £160 million.

• Netflix (NFLX.US) is up 1.5% today despite a decline in its streaming market share in August. Investors are counting on a rebound, anticipating that upcoming premieres and new content will encourage customers to return to the platform. Increased user engagement and attracting new subscribers could improve the company’s financial results in the coming months.

• New Fortress Energy (NFE.US) +42% surged after securing a $4B, seven-year LNG supply deal with Puerto Rico, which includes a three-year extension option and safeguards ensuring terminal access if deliveries fail.

• Oruka Therapeutics (ORKA.US) +10.85% rose after Phase 1 data showed its psoriasis drug ORKA-001 outperformed AbbVie’s Skyrizi with a ~100-day half-life, enabling annual dosing. Also announced a $180M private placement.

• Lyft (LYFT.US) +14.50% jumped after partnering with Waymo to launch autonomous ride-hailing in Nashville by 2026, including a dedicated AV facility and integration into Lyft’s platform.

• LightPath Technologies (LPTH.US) +4.40% gained on $22.1M in follow-on orders for infrared camera systems, bringing total commitments for 2026–2027 to $40.3M.

• Baidu (BIDU.US) +7.60% climbed after unveiling its upgraded AI model Ernie X1.1, highlighting advances in factual accuracy, instruction following, and agentic capabilities.

• Forward Industries (FORD.US) -11.0% dropped after filing for an at-the-market offering of up to $4B in stock, with proceeds earmarked for general corporate use including a Solana token strategy.