NEW YORK, March 18, 2026, 09:05 EDT
- U.S. stock futures slipped into the red after February’s producer price data came in hotter than anticipated, denting expectations for an imminent rate cut from the Federal Reserve.
- Markets are betting the Fed keeps rates stuck at 3.50%-3.75% this Wednesday, but attention has shifted to the fresh dot plot and what Chair Jerome Powell will say at his press conference.
- Brent crude held north of $100 a barrel, even as Iraq eased some export pressure. Traders eyed Micron’s post-close results, keeping the chip names active.
U.S. stock futures slipped after a surprising jump in wholesale inflation added some uncertainty ahead of the Federal Reserve’s policy call this day. Dow e-minis fell 115 points as of 8:36 a.m. ET; S&P 500 and Nasdaq 100 futures were also in the red by 9:05 a.m. EDT.
This time, the Fed’s expected pause isn’t just another placeholder. Market attention is glued to the dot plot—where policymakers sketch out their own rate projections—and to any hint the Iran war’s oil price spike could push rate cuts further out. Now, futures are pricing in just a single quarter-point reduction for 2026, set for September.
The Producer Price Index climbed 0.7% in February from the previous month, up 3.4% year-over-year—each figure beating analyst expectations. Stripping out food and energy, core PPI advanced 0.5% on the month and posted a 3.9% annual gain.
Traders aren’t really expecting a rate move today—they’re zeroed in on the Fed’s tone about what’s ahead. The statement lands at 2 p.m. EDT, and Powell steps up at 2:30 p.m. Tony Sycamore at IG notes that the current dot plot suggests just one cut this year, though he flags a risk that the projections turn more hawkish if officials see the oil shock making inflation tougher to shake.
Diane Swonk, chief economist at KPMG, echoed that sentiment. In her view, these forecasts come “amidst a cloud of uncertainty,” with expectations pointing to weaker growth, stickier inflation, and more joblessness—a tough set of challenges for a central bank already divided on how to balance employment support against renewed inflation risks. Reuters
Oil remains the key variable here. Brent crude added 0.6%, last quoted at $104.02 a barrel as of 1155 GMT. U.S. West Texas Intermediate sat at $94.93, despite Iraq restarting some pipeline flows to Turkey. MUFG analyst Soojin Kim noted the bounce is muted: Iraq’s production lags well below pre-crisis marks, and the Strait of Hormuz remains mostly choked off.
The spotlight shifts to Micron after the close. The chipmaker’s earnings have already helped calm tech nerves, paired with news that Nvidia got the green light from China to sell a top-tier AI chip. Whatever Micron says will ripple across the memory sector—think Samsung, SK Hynix—traders are watching.
On Wednesday, Samsung co-CEO Jun Young-hyun described what he called an “unprecedented supercycle” for chips, crediting heavy AI data centre investment as the catalyst. That doesn’t answer the larger macroeconomic picture, but it does shed light on why investors are sticking with chip stocks even as the outlook for rates turns gloomier. Reuters
Still, there’s room for a swing in either direction. Should Powell wave off the oil move as a blip and the dot plot still support a single cut, futures might claw back some of their earlier losses. On the other hand, if policymakers suggest that rate hikes are just as much on the table as cuts—a scenario BNP Paribas has warned about—both stocks and Treasuries could see fresh downside.
The simple bet on a Fed rate cut isn’t holding up. As the bell approaches, traders are juggling hotter wholesale inflation, Brent crude trading north of $100, and a Fed meeting that no longer feels routine.
