Dow, S&P 500, Nasdaq Futures Edge Higher Ahead Of Fed Rate Hike Expectations: CRCL, WING, CAVA, FPS Stocks In Focus

According to CME FedWatch data, there is a 92.4% probability that the Fed will hike interest rates by 25 basis points from the current 3.50% to 3.75%.

• Many Wall Street analysts and commentary services also agree that a hike is the most likely outcome from the Federal Open Market Committee meeting this week.
• Some analysts believe that should the Fed choose to hike benchmark rates, it will not be a ‘one-and-done’ move. 
• Meanwhile, yields on long-dated bonds have been surging amid ongoing inflationary pressures as oil prices continue to climb amid the conflict in the Middle East, with the 10-year yield rising above 5% on Tuesday.

U.S. stock futures traded higher in the overnight session late Tuesday as markets are increasingly pricing in a rate hike from the Federal Reserve ahead of the decision expected on Wednesday. 

Dow futures climbed 0.17%, the S&P 500 gained 0.15%, and the Nasdaq-100 rose 0.11% at 10:31 PM EDT.  

On Tuesday, all three benchmark indexes closed lower amid ongoing AI pressures and rising oil prices. The Nasdaq Composite led the decline, shedding more than 200 points to close 0.78% lower. The Dow Jones Industrial Average and S&P 500 lost 0.63% and 0.45% at close, respectively.   

Index	Move	Close
Dow Jones Industrial Average	-0.63%	52,093.11
S&P 500	-0.45%	7,585.73
Nasdaq Composite	-0.78%	25,981.57

Key US Market Drivers

This week, U.S. markets are focused on the Federal Reserve's policy rate decision, expected to be announced on Wednesday. 

According to CME FedWatch data, there is a 92.4% probability that the Fed will hike interest rates by 25 basis points from the current 3.50% to 3.75% amid ongoing inflationary pressures. 

Many of Wall Street’s analysts and commentary services also agree that a hike is the most probable outcome from the Federal Open Market Committee (FOMC) meeting this week.

Some analysts believe that should the Fed choose to hike benchmark rates, it will not be a ‘one-and-done’ move. 

BMO Capital Markets Senior Economist Jennifer Lee said in a Bloomberg interview that Fed Chair Kevin Warsh has sounded progressively more hawkish in public appearances since taking office in May. In light of this, the firm now expects at least a couple of rate hikes by the end of the year. 

Mohamed El-Erian, Chief Economic Advisor at Allianz, also believes a rate hike will not be a one-off move. “Rather, market pricing suggests that it will be part of a tightening cycle, with another hike expected before year-end and at least one more in the first half of 2027,” he said in a post on X. 

Meanwhile, yields on long-dated bonds have been surging amid ongoing inflationary pressures as oil prices continue to climb amid the conflict in the Middle East, with the 10-year yield rising above 5% on Tuesday, to its highest level in almost two decades. 

The U.S. 10-year Treasury yield was trading at 4.988% at the time of writing, while the U.S. 30-year Treasury yield was trading at 5.354%. 

U.S. Treasury Secretary Scott Bessent defended the Trump administration’s economic policies while testifying before the House Financial Services Committee on Tuesday. 

He argued that the Treasury’s recent purchases of long-dated Treasury bonds helped contain yields despite continued pressure in the long end of the market. Democrats questioned the effectiveness of the buybacks, pointing to the continued rise in long-term Treasury yields, but Bessent said that yields “would have been yet higher” without the Treasury’s intervention.

“We proceeded to have two of the most successful Treasury bond auctions that we’ve had in 20 years,” he added. 

Trending Stocks To Watch 

Circle (CRCL): Shares of the financial technology platform were in focus after the stock fell more than 11% at close Tuesday after the Clarity Act failed to garner enough votes to pass in the Senate. 

Wingstop Inc. (WING): The chicken-wings restaurant chain’s shares plunged more than 12% at close after Placer.ai’s August 2026 Retail and Dining Index showed brick-and-mortar dining visits fell 2.4% year over year as higher grocery and gas costs encouraged consumers to eat at home.

CAVA Group Inc. (CAVA): The Mediterranean fast-casual restaurant brand’s shares also dropped nearly 9% at close Tuesday on the same declining dining-visits data mentioned above.

Forgent Power Solutions Inc. (FPS): Shares jumped more than 9% at close after the company reported record fourth-quarter (Q4) results, with backlog soaring 256% year over year to a record $3 billion on $1.5 billion in bookings and a 3.3x book-to-bill ratio.

Other Market Trends 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Invesco QQQ Trust (QQQ) climbed higher in the overnight session.

The iShares 20+ Year Treasury Bond ETF (TLT) was up 0.32% amid ‘extremely bearish’ sentiment. 

At the time of writing, Brent crude futures expiring in November were down about 0.47% to $108.24 a barrel, while WTI crude futures expiring in October were down 0.89% to $104.89 per barrel.

Asian markets opened mixed on Wednesday. South Korea's KOSPI was trading higher at the time of writing, while Japan’s Nikkei 225 and China’s SSE Composite were trading lower. Australian stocks edged higher at the open.

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