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Investing.com - U.S. stock futures hover around the flatline, with markets gauging ongoing euphoria around artificial intelligence and minutes from the Federal Reserve’s latest meeting. The Federal Reserve remained divided over the trajectory of interest rates over the rest of 2025, as officials assessed the twin pressures of cooling employment and stubbornly elevated inflation. Elsewhere, Delta and PepsiCo are due to unveil quarterly results, while gold pulls back after a record-setting run higher.
1. Futures subdued
U.S. stock futures searched for direction on Thursday, as investors poured through minutes from the Fed’s most recent meeting and assessed an artificial intelligence-driven rally in tech shares in the prior session.
By 03:12 ET (07:12 GMT), the Dow futures contract and S&P 500 futures were both mostly unchanged, while Nasdaq 100 futures inched up by 16 points, or 0.1%. The benchmark S&P 500 and tech-heavy Nasdaq gained on Wednesday, logging new all-time closing peaks, boosted in large part by AI-fueled mega-cap companies which have driven much of the equity market’s advances this year.
Despite worries around the perceived circular nature of many recent AI-related deals, enthusiasm around the nascent technology has shown few signs of abating. Little progress has also appeared in breaking a prolonged stalemate in Washington that caused a now more than week old shutdown of the federal government -- possibly threatening to delay the release of more economic data in the days ahead.
Given the enduring AI boom and dearth of fresh gauges of the U.S. economy, traders are not expected to have much to work with prior to the start of the third-quarter earnings season next week, analysts have flagged.
2. FOMC minutes
Markets did have the opportunity to parse through minutes from the Federal Open Market Committee’s September meeting, when the central bank opted to slash interest rates by 25 basis points and suggested that more reductions could be coming by the end of the year.
The minutes indicated that the committee was divided over the path of rates, with much of the debate centering around a slowing labor market and sticky inflationary pressures. Theoretically, a rate cut helps to spur on investment and hiring, albeit at the risk of reigniting price growth.
Most officials "judged that it likely would be appropriate to ease policy further over the remainder" of 2025, although the exact timing and scope of the cuts remained a source of uncertainty, the minutes showed.
In a note, analysts at Capital Economics said the minutes confirmed that most FOMC participants backed bringing down rates to a more "neutral setting," or a level that neither aids nor hinders the wider economy, due to persistent "downside risks" to the employment picture.
"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," the analysts said.
Following the publication of the minutes, bets that the Fed will slash rates by a further 25 basis points at its upcoming meeting this month were intact.
3. Delta to report
While the quarterly corporate reporting period is due to begin in earnest next week, investors will still be keeping tabs on numbers from Delta Air Lines on Thursday.
The numbers, due out before the opening bell, are set to be unveiled just weeks after the carrier reaffirmed its full-year and current-quarter financial guidance.
Delta also lifted the lower end of its revenue outlook for the third quarter through September, saying it now anticipates a top-line uptick of 2% to 4%, compared to a prior forecast of 0% to 4%.
It was a sign of what has become a much more upbeat outlook for the U.S. travel industry after a bout of turmoil and gloom earlier this year following the announcement of Trump’s aggressive import tariffs.
Many travelers moved to take advantage of deep discounts or deals to set out on summer vacations, while industry executives have highlighted confidence that resilience in the travel sector could give airlines room to raise airfares in the final months of 2025.
4. PepsiCo earnings ahead
PepsiCo is also scheduled to report before the market opens, as analysts weigh suggestions for carving up the packaged food giant from activist investor Elliott Investment Management.
Elliott, which announced a $4 billion stake in the company in September, has suggested that Pepsi ditch brands like Quaker and even spin off its bottling network in a bid to slash costs and bolster margins.
The hedge fund has added that these changes could allow Pepsi to focus its operations on new chips and sodas and streamline its operations. Elliott and Pepsi are engaged in conversations about the proposals, according to media reports, although other investors have noted worries that the separation of the bottling business in particular could take years and dent margins and earnings.
Shares in the maker of popular items such as Mountain Dew soda and Lay’s potato chips have slumped by more than 7% so far this year, trailing the broader S&P consumer staples index.
"[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 in a note.
5. Gold retreats after record run
Gold prices fell slightly as a ceasefire between Hamas and Israel curbed some safe-haven demand, although the yellow metal still remained close to recent record highs.
Bullion, which has been on a torrid run that has seen its price rip above $4,000 per ounce for the first time, remained underpinned by concerns over Japanese fiscal health, the ongoing U.S. government shutdown, and a political crisis in France.
Dovish-sounding comments from the Fed minutes also kept markets largely optimistic over more rate cuts, further supporting gold.
Spot gold fell 0.2% to $4,032.10 an ounce, while gold futures for December fell 0.5% to $4,050.50/oz by 03:48 ET.