US Stock Market Ahead Of Fed Policy: Dow Jones, Nasdaq, S&P 500 Crash; Futures Up On Wednesday, What To Expect

The US stock market continued to be under pressure ahead of the Federal Reserve's policy on Thursday. Overnight, the Dow Jones and Nasdaq Composite crashed from 200 points to 330 points, while the S&P 500 followed the bearish trend. Meanwhile, on September 16, ahead of the Fed outcome, all US stock futures traded higher as the market widely predicted the largest central bank to deliver their first rate hike in 3 years. Meanwhile, credit-sensitive stocks and AI stocks will be in focus.

US Stock Market Futures Today, September 16, 2026

At the time of writing, the Dow Jones futures traded at 52,200, higher by 85 points or 0.16%. While the S&P 500 futures edged higher by 12.25 points or 0.16% to trade at 7,601.50. Further, the Nasdaq Composite futures inched up by 30 points to trade at 28,991.25.

US stock futures edged higher as investors awaited the latest Federal Reserve policy decision, with markets widely expecting the central bank to deliver its first rate hike in around three years. Traders will closely watch for guidance on another potential increase later this year, with expectations building for a move in October or December, as per Trading Economics.

Dow Jones + Nasdaq Composite + S&P 500

Meanwhile, on Tuesday, the Dow Jones Industrial Average index plunged by 328.09 points or 0.63% to close at 52,093.11. Also, the Nasdaq Composite index dropped by 204.84 points or 0.78% to close at 25,981.57. Lastly, the S&P 500 slipped by 34.25 points or 0.45% to end at 7,585.73.

Stocks slipped after the 10-year Treasury note yield climbed above 5.04% earlier today, the highest level since 2007. Oil also continued its relentless ascent. The Federal Reserve gathers today ahead of a decision tomorrow afternoon, with odds of a rate hike now at 92%, according to the CME FedWatch Tool, as per Charles Schwab's note.

Also, Trading Economics data pointed out that equities faced pressure from soaring oil prices and higher Treasury yields. Losses were broad-based, with credit-sensitive AI hyperscalers particularly affected by rising borrowing costs, including Alphabet (-1.3%), Microsoft (-1.6%), Oracle (-3.1%), and Amazon (-2%). Investors also continued to weigh growing safety concerns surrounding AI development, although Nvidia CEO Jensen Huang argued that additional AI security regulations are unnecessary and that market forces will encourage companies to innovate safely.

If the Fed hikes key rates on September 16, it will be the first in 3 years. The last hike was in mid-2023, which later followed with a series of rate cuts as global economic conditions eased from the Russia-Ukraine and Israel-Hamas wars. Currently, the Fed's fund rates are at 3.5% to 3.75%.

Should Fed Hike Rates Today?

As per Schwab's note, failure to hike now—after the August core monthly Consumer Price Index (CPI) rose a higher-than-expected 0.3% excluding food and energy—would potentially mean even higher yields. Fed Chairman Kevin Warsh sounded hawkish in his Jackson Hole speech last month, and with CPI and employment both remaining relatively high, he might risk market credibility if he doesn't follow up words with action.

Meanwhile, Schwab experts now expect at least one Fed rate hike this year, with the first likely this week.

How Fed Policy Will Impact Global Markets Today?

"Wall Street ended lower as the U.S. 10-year Treasury yield hovered around 5%, while Asian markets are showing a cautiously positive bias. Higher borrowing costs and elevated crude prices remain the principal challenges for global equities," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.

He added that the the Federal Reserve's policy decision tonight will be the key market trigger. Although a quarter-point rate increase is widely expected, the market's direction will depend largely on the Fed's guidance on the outlook for further tightening. Hawkish commentary could strengthen the dollar and place additional pressure on global equities, the rupee and foreign flows, while balanced guidance may support a relief rally.

Apart from Fed policy, on Wednesday, a host of economic data will also be released. These include Advance Retail Sales, FOMC Economic Projections (SEP), and Federal Reserve Press Conference.

Since earnings season is over, only few companies will declare their quarterly results. On Wednesday, General Mills Inc. (GIS), Lennar Corp. (LEN), and Cracker Barrel Old Country Store Inc. (CBRL) will be in focus for their earnings on Wall Street.

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