Futures Steady Ahead of Powell as Traders Scale Back Rate-Cut Bets – Europe Market Wrap

US stock futures paused this week’s string of declines amid subdued trading ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole speech, with markets scaling back bets on imminent rate cuts.

S&P 500 contracts erased early losses to rise 0.2% after the US benchmark slipped for five straight sessions. European stocks advanced 0.3%, nudging toward an all-time high. US Treasuries held steady after Thursday’s pullback, with the 10-year rate at 4.33%. The dollar was little changed.

A seltoff in big tech this week has halted the record-breaking rally in US stocks. Investors are awaiting Powell’s latest policy blueprint, weighing whether the Fed will stay cautious on inflation, which is showing signs of stickiness, or tilt toward supporting a softer labor market.

The stakes are heightened by pressure from the Trump administration to cut rates and growing divisions within the Fed’s rate-setting committee. To keep his options open, Powell may emphasize that the Fed’s September move will be guided by employment and inflation figures set for release early next month.

Swaps have sharply reduced the odds of aggressive near-term easing, now pricing about a 65% chance of a cut next month and fewer than two moves this year. Little more than a week ago, markets were betting on a full quarter-point cut in September, with some traders even positioning for a half-point move.

A hawkish tone in the speech is expected to weigh on shorter-maturity government bond yields. It could also add pressure to the recent series of large options market trades, which are positioned for an outsized rate cut next month and a total of 75 basis points in reductions by year-end.

In premarket trading. Alphabet rose more than 1%, leading gains among the Magnificent Seven heavyweights. Nvidia, meanwhile, was the sole laggard, slipping about 1%. The firm instructed component suppliers to halt production of its H20 AI chip, The Information reported.