Wall Street heads into a pivotal week with the Federal Reserve's interest-rate decision on Wednesday expected to dominate trading, as investors prepare for what would be the central bank's first rate increase of the current cycle. Federal funds futures are pricing in roughly an 85% probability of a 25-basis-point hike, with attention focused on the Fed's policy statement and Chair Kevin Warsh's 2:30pm ET press conference for clues on further increases. The decision follows hotter-than-expected inflation data and a sharp rise in oil prices, with Brent crude above $107 a barrel early Monday. Kathleen Brooks, research director at XTB, said the combination of rising energy prices and uncertainty around artificial intelligence investment creates a challenging backdrop, noting that more than half of the S&P 500's sectors are linked to AI and the largest hyperscalers account for roughly one-third of the index's weighting. Deutsche Bank expects the Fed to raise its target range to 3.75% to 4% and forecasts headline retail sales to rebound 0.9% in August after falling 0.6% in July, while sales excluding autos are forecast to rise 0.6%.
Deutsche Bank Aktiengesellschaft
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