Dow Jones & Nasdaq 100: US Futures Slip After Fed Update

• Market expectations for a March 2026 Fed rate cut dropped from 17.3% to 13.5%, while June rate cut probability fell from 65.4% to 60.8% after Powell cited elevated inflation as an obstacle to further cuts despite two FOMC members dissenting.
• Microsoft's weaker-than-expected cloud growth results pressured tech futures, with the Dow Jones E-mini falling 98 points, while the Nasdaq 100 and S&P 500 E-minis declined 2 and 5 points respectively.
• Technical indicators remain bullish with all three major index futures holding above their 50-day and 200-day EMAs, though analysts warn that hawkish Bank of Japan policy or disappointing earnings could trigger an unwind of yen carry trades and derail the positive outlook.

Market Summary: US Futures Decline Following Federal Reserve Decision

Key Developments

US stock futures retreated in Asian trading on January 29, 2026, following the Federal Reserve's decision to maintain interest rates at 3.75%. Fed Chair Powell tempered expectations for near-term rate cuts, citing elevated inflation concerns despite two FOMC members dissenting in favor of a cut.

Market Reaction

• Dow Jones E-mini: Down 98 points
• Nasdaq 100 E-mini: Down 2 points
• S&P 500 E-mini: Down 5 points

Probability of a March 2026 rate cut dropped from 17.3% to 13.5%, while June cut expectations fell from 65.4% to 60.8%.

Corporate Focus

Microsoft (MSFT) shares declined after reporting slower Q4 cloud growth. Market attention now shifts to major earnings releases from Apple (AAPL), Caterpillar (CAT), Mastercard (MA), and Visa (V). Strong results could push futures toward record highs.

Economic Indicators

US jobless claims data due Thursday is expected to show an increase from 200,000 to 205,000 for the week ending January 24. A larger-than-expected rise (near 250,000) could boost June rate cut expectations.

Technical Outlook

All three major indices remain above their 50-day and 200-day EMAs, signaling continued bullish bias. Key resistance levels include 49,901 (Dow), 26,399 (Nasdaq 100), and 7,036 (S&P 500).

Risk Factors

Potential market headwinds include geopolitical tensions, Bank of Japan policy tightening triggering yen carry trade unwinding, disappointing earnings, and shifts in Fed rate cut expectations. Despite short-term volatility, the medium-term outlook remains constructive supported by economic strength and earnings optimism.