U.S. equity futures showed little directional momentum on Monday evening, with Dow futures slipping modestly amid a policy proposal affecting Medicare Advantage payments and investors braced for a key Federal Reserve decision plus heavyweight technology earnings.
Futures and regular session moves
S&P 500 Futures were largely unchanged at 9,982.0 points, while Nasdaq 100 Futures gained 0.2% to 25,898.2 points by 19:54 ET (00:54 GMT). Dow Jones Futures traded about 0.3% lower at 49,409.0 points.
In regular trading earlier in the day, major U.S. benchmarks finished in positive territory. The Dow Jones Industrial Average rose 0.6%, the S&P 500 advanced 0.5%, and the NASDAQ Composite increased by 0.4%.
Health insurers react to Medicare Advantage payment proposal
Dow futures softened after several large health insurers posted sharp declines in after-hours trading. The moves followed a proposal from the Trump administration to set near-flat payment rates for Medicare Advantage plans. Markets had been anticipating a more generous increase, and the near-flat proposal disappointed investors.
Shares of UnitedHealth Group (NYSE:UNH), Humana Inc (NYSE:HUM), and CVS Health Corp (NYSE:CVS), which operates Aetna, fell steeply in extended trading. Market commentary cited concerns that slower reimbursement growth could put pressure on margins for insurers already facing rising medical costs.
Trade policy development
In other developments, President Donald Trump said he is raising tariffs on South Korean imports to 25% from 15%, stating that Seoul’s legislature failed to approve a bilateral trade deal reached last year. The announcement added an additional policy variable that markets were parsing alongside health-care and monetary policy developments.
Federal Reserve meeting in focus
Investors entered a wait-and-see mode as attention turned to the Federal Reserve’s two-day policy meeting, which concludes on Wednesday. The U.S. central bank is widely expected to hold interest rates steady, with policymakers weighing the impact of easing financial conditions, signs of cooling inflation, and a labor market that has displayed indications of gradual moderation.
Recent economic data have reinforced expectations that the Fed will avoid signaling near-term rate cuts, as officials seek greater confidence that inflation will move sustainably toward their 2% target. Market participants will be closely parsing the Fed’s post-meeting statement and Chair Jerome Powell’s press conference for any clues on the timing and pace of potential rate reductions later in the year.
Megacap earnings loom
Investor focus is also on earnings from the so-called "Magnificent Seven," which are expected to set the tone for U.S. equities in the coming days. Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Tesla (NASDAQ:TSLA) are all due to report results on Wednesday, while Apple Inc (NASDAQ:AAPL) is scheduled to report on Thursday.
These results follow a strong but increasingly selective rally in technology shares, a rally driven by optimism around artificial intelligence, cloud spending and productivity gains. Market participants will be looking for commentary from the megacaps on the returns from AI-related investments, trends in consumer demand, and any margin pressures stemming from higher costs.
What investors will watch next
- The Fed’s post-meeting statement and Chair Powell’s press conference for guidance on the outlook for policy and potential timing of rate cuts.
- Quarterly results and management commentary from major technology companies for signals about AI investment returns, demand, and margin dynamics.
- Market reaction to the Medicare Advantage payment proposal, particularly the performance of large insurers as investors reassess reimbursement growth expectations.