U.S. stock futures were flat early Thursday as investors balanced the excitement surrounding artificial intelligence with fresh details from the latest Federal Reserve meeting minutes. Policymakers were shown to be divided over the pace and scale of further interest rate cuts for the rest of 2025, reflecting concerns over a softening labor market and persistent inflation. Upcoming earnings from Delta Air Lines (NYSE:DAL) and PepsiCo (NASDAQ:PEP), as well as a slight retreat in gold prices, were also shaping market sentiment.
Futures Stay Flat as Investors Digest Fed Minutes
At 03:12 ET, futures on the Dow Jones Industrial Average and S&P 500 were little changed, while Nasdaq 100 futures edged 0.1% higher. The S&P 500 and Nasdaq reached fresh record closes on Wednesday, powered largely by gains in major AI-focused technology companies.
Despite some unease over “the perceived circular nature of many recent AI-related deals,” investor appetite for the technology remains strong. Meanwhile, the ongoing government shutdown in Washington has created uncertainty around the timing of key economic data releases, leaving markets with little new information ahead of the third-quarter earnings season.
FOMC Minutes Highlight Policy Divide
The minutes from the Federal Open Market Committee September meeting showed that the central bank cut interest rates by 25 basis points but left the door open for further reductions before year-end. Officials were split on how quickly to ease policy, with debates centered on weaker employment trends and stubborn price pressures.
Most members “judged that it likely would be appropriate to ease policy further over the remainder” of 2025, though the timing and scale of the cuts remained uncertain.
Analysts at Capital Economics noted that the minutes reaffirmed the preference to return rates to a more “neutral setting” because of “downside risks” to employment.
“Nonetheless, with ‘a majority of participants’ still emphasising the ‘upside risks to their outlooks for inflation,’ we remain comfortable with our view that the FOMC will proceed at a slower pace than market pricing suggests,” they added.
Market bets on another 25 basis point cut later this month remained steady after the release.
Delta Earnings to Provide Early Travel Sector Insight
While the main earnings season kicks off next week, investors are paying close attention to Delta’s results, which will be published before the market opens. The airline recently reiterated its full-year guidance and raised the lower end of its Q3 revenue outlook to 2% to 4%.
The brighter forecast reflects improving travel demand after earlier turbulence linked to Donald Trump’s import tariffs. Heavy discounts boosted summer bookings, and executives have expressed optimism that strong demand will give the sector room to increase fares in late 2025.
PepsiCo Results Under Elliott’s Watch
PepsiCo is also reporting earnings before the open, as investors monitor developments involving Elliott Investment Management, which took a $4 billion stake in the company in September. Elliott has urged the company to divest brands like Quaker and potentially spin off its bottling business to “slash costs and bolster margins.”
The activist investor argues such changes could allow Pepsi to concentrate on core products and streamline its structure. Some shareholders, however, have voiced skepticism about how quickly or effectively a bottling separation could be executed. Shares of PepsiCo have fallen more than 7% this year.
“[S]entiment has improved somewhat with the presence of Elliott and the expectation of some type of strategic action to bolster shareholder value, but the whole staples space is facing cyclical and secular headwinds and management is likely to pushback against some of the more radical proposals, like spinning off bottling,” analysts at Vital Knowledge said.
Gold Pulls Back After Hitting Record Highs
Gold prices eased slightly after a ceasefire agreement between Israel and Hamas reduced safe-haven demand, though the metal remained near record highs above $4,000 an ounce. Investors continue to monitor fiscal risks in Japan, the U.S. government shutdown, and political uncertainty in France, which have supported gold in recent weeks.
Dovish signals in the Fed minutes also encouraged expectations for additional rate cuts. Spot gold slipped 0.2% to $4,032.10 an ounce, while December futures were down 0.5% to $4,050.50 by 03:48 ET.
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