Dow futures are down, while S&P and Nasdaq futures are up, as investors prepare for an important Federal Reserve interest rate decision later this week. The labor market is showing signs of slowing down, and inflation remains high. As a result, the Fed is expected to cut rates by at least 25 basis points on Wednesday. In another location, negotiators from the U.S. and China are in Spain for their second day of talks about trade and the future of ByteDance’s popular TikTok app in the U.S.

Dow futures stayed close to unchanged on Monday as the week ahead features important interest rate decisions from major central banks, including the Fed, the Bank of Canada, and the Bank of England. As of 03:26, the S&P 500 futures contract increased by 9 points, which is 0.1%. Meanwhile, futures rose by 29 points, also 0.1%, while Dow futures decreased by 287 points, or 0.6%. Last week, the main averages showed different results at the end of trading. The Nasdaq Composite, which focuses on technology, reached a new record closing high, while the S&P 500 and the Dow Jones Industrial Average both saw slight declines. Shares in the Nasdaq rose after the software giant avoided a significant antitrust penalty from the European Union by proposing a lower price for its Office service, not including Teams. The stock price went up, partly because the board chair of the electric carmaker mentioned that CEO Elon Musk was now focused on managing the company after spending several months at the White House. Traders were looking at data from the University of Michigan, which indicated that consumer sentiment weakened in September. Households are also concerned about a potential increase in inflation due to tariffs.

This week, all eyes are on the Fed, as markets are nearly convinced that the central bank will cut interest rates at the conclusion of its two-day meeting on Wednesday. With indications of a weakening U.S. labor market, it is expected that policymakers will support the first rate cut since the easing cycle was put on hold in December. Lowering rates could, in theory, encourage more investment and job creation. Yet, cutting back may lead to increased inflation pressures simultaneously. Last week, the monthly U.S. consumer price index showed a slight increase because of rising housing and food prices, which could suggest persistent inflation. However, another measure showing an increase in weekly initial jobless claims probably maintained the course for a Fed rate cut. The likelihood of a 25 basis point cut in borrowing costs is now around 95%, while there is about a 5% chance of a larger half-point reduction. The Fed’s target rate is now between 4.25% and 4.5%. “A slowing economy and a weaker job market will likely reduce inflation related to tariffs, and the Fed is now able to start easing its policy from a ‘somewhat restrictive’ stance towards a neutral position,” analysts mentioned.

Officials from the U.S. and China are scheduled to meet again after reportedly making little progress on the first day of new discussions on Sunday. Expectations for the discussions in Madrid are low, especially regarding any significant progress on the ongoing trade issues between the two biggest economies in the world. People are anticipating that the talks will end with an extension of the deadline for TikTok, the short-form video app owned by China’s ByteDance, to sell its U.S. operations. If ByteDance doesn’t sell the unit by September 17, TikTok could be shut down in the U.S., President Donald Trump is expected to prolong the deadline. Bessent informed that both parties would “begin anew in the morning” after a six-hour meeting on Sunday. At the same time, China’s embassy in Madrid told that a final news conference might happen on Monday, indicating that the discussions could be coming to an end soon. Bessent will travel to London on Tuesday, ahead of Trump’s state visit with King Charles later in the week.

Before negotiations began in Spain, China’s Ministry of Commerce launched an investigation into U.S. policies regarding chip trade discrimination. Beijing is set to investigate if Washington has treated Chinese companies unfairly by imposing various restrictions, such as export controls, in recent years. The ministry stated that these actions aim to slow down China’s progress in advanced computing and artificial intelligence technologies. An investigation has started regarding the suspected dumping of U.S. analog chips in common items such as temperature sensors and hearing aids. Analysts at Vital Knowledge mentioned that investors should “expect pressure” on Monday.

Oil prices went up, continuing their recent increase due to possible interruptions in Russian supply after Ukrainian drone strikes targeted Moscow’s energy facilities. At 03:27, futures increased by 0.5% to $67.29 a barrel, while U.S. West Texas Intermediate crude futures went up by 0.1% to $62.76 a barrel. Last week, both contracts rose by over 1% as Ukraine increased its attacks on Russian oil facilities, targeting the major oil export terminal Primorsk and the Kirishinefteorgsintez refinery, which is among the two largest refineries in Russia. The strikes could significantly reduce Russian oil production and may lead to supply issues, particularly for major markets like India and China.