Nasdaq to rebound but Dow seen flat ahead of Fed decision

• The Nasdaq fell nearly 2% in the previous session, leading losses as tech and semiconductor stocks declined, while futures indicate a 0.5% rebound
• CME FedWatch data shows futures markets pricing in approximately 60% odds of at least one rate cut before year-end
• SpaceX shares rose 4.8% Tuesday and gained another 1.3% in pre-market trading, pushing its market value above Amazon's despite valuation concerns

Market Summary: Fed Decision Awaited as Tech Stocks Diverge

Market Overview:

US futures point to a cautious Wednesday open, with the Dow Jones and S&P 500 expected to remain flat while the Nasdaq is forecast to rebound 0.5% after Tuesday's tech-heavy sell-off. The Nasdaq dropped nearly 2% and the S&P 500 fell 0.9% in the previous session, driven by semiconductor and tech sector weakness.

Federal Reserve Focus:

Investors are awaiting the first interest rate decision under new Fed Chair Kevin Warsh, scheduled for the quarterly meeting on June 17, 2026. Markets widely expect rates to remain unchanged, with focus shifting to updated economic forecasts and the "dot plot" of policymakers' rate expectations. Warsh has hinted at potentially eliminating the dot plot in favor of less transparent communications.

According to CME FedWatch, futures markets currently price in approximately 60% probability of at least one rate cut before year-end.

Individual Stock Movement:

SpaceX continued its strong performance, rising 4.8% on Tuesday and gaining another 1.3% in pre-market trading Wednesday. The company's market value has now surpassed Amazon's, despite ongoing investor debates about valuation amid index inclusion and limited free float driving demand.

Analyst Commentary:

Wedbush analyst Dan Ives dismissed concerns that SpaceX's blockbuster IPO would negatively impact the broader tech and AI sector, characterizing the market debut as a "Goldilocks outcome." He urged investors to view worries about IPO-driven chip stock sell-offs as a buying opportunity.

Market Implications:

Trading activity remains cautious as investors balance tech sector volatility with monetary policy uncertainty and await clearer guidance on the Fed's rate trajectory.