U.S. stock futures ticked lower on Monday as investors prepared for a pivotal week highlighted by a Federal Reserve interest rate decision and key monthly inflation data.

Key Points:

1. Futures Lower:

   • By 03:46 ET (07:46 GMT), Dow futures dropped 87 points (0.2%).
   • S&P 500 futures slipped 6 points (0.1%).
   • Nasdaq 100 futures fell 43 points (0.3%).

   The declines follow choppy trading in the previous session, where a stronger-than-expected jobs report fueled concerns about the Fed potentially delaying rate cuts longer than anticipated. Despite this, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all recorded weekly gains.

2. Federal Reserve Decision This Week:

   • The Fed is expected to maintain borrowing costs at over two-decade highs when it concludes its policy meeting on Wednesday.
   • Attention will focus on the Fed's outlook for rates, particularly the update to the dot plot, which might indicate expectations for two 25-basis point cuts this year, down from three in March.
   • Recent comments from Fed officials suggest a preference to see more definitive evidence of cooling inflation before commencing rate cuts.

3. May Inflation Data:

   • New U.S. inflation figures are set to be released just hours before the Fed's announcement on Wednesday.
   • Economists anticipate annual headline inflation to match the previous month's pace but slow on a monthly basis. Core inflation, excluding volatile items like food and fuel, is expected to decelerate slightly year-on-year while staying consistent with April's rate month-on-month.
   • These figures will be crucial for Wall Street as they could influence the Fed's policy decisions later this year. Currently, CME Group's FedWatch Tool indicates a 53% probability of a rate cut by September.

4. Elliott Takes Significant Stake in Southwest Airlines:

   • Elliott Investment Management has acquired nearly $2 billion in Southwest Airlines stock and plans to advocate for changes to address the airline's recent underperformance.
   • This makes Elliott one of Southwest's largest shareholders, according to sources cited by the Wall Street Journal.

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