U.S. stock futures fell on Sunday evening following the S&P 500’s longest winning streak since 2004. Investors are becoming cautious ahead of an important Federal Reserve policy meeting and ongoing trade discussions between the U.S. and China.

By 19:56 ET (23:56 GMT), S&P 500 Futures dropped 0.6% to 5,674.75 points, Nasdaq 100 Futures slipped 0.7% to 20,060.0 points, and Dow Jones Futures decreased by 0.5% to 41,218.0.

Record Rally Fueled by Strong Labor Data

Last week’s gains were powered by better-than-expected labor market statistics. Nonfarm payrolls increased by 177,000 in April, surpassing economists’ forecasts of 138,000, signaling ongoing strength in the job market. March’s figure was revised down to 185,000, yet the overall trend supports the notion of fundamental economic health despite ongoing concerns about tariffs and global trade tensions.

This rally resulted in a nine-session winning streak for the S&P 500, its longest in over 20 years, along with weekly gains of 3% to 5% across all major U.S. indices.

Trade Talks Bring Optimism Yet Caution

Friday’s positive sentiment was further fueled by China’s announcement of openness to restart trade discussions, contingent upon the removal of unilateral U.S. tariffs. These comments, coupled with signals from Washington indicating readiness to engage in talks, ignited speculation about a thaw in U.S.-China trade relations.

However, traders are remaining on guard as no formal agreements have emerged. Investors are also closely monitoring China’s upcoming trade data, which will provide insights into the effects of U.S. tariffs on its export-driven economy.

Fed Policies in the Spotlight

Focus now shifts to the Federal Reserve’s forthcoming policy meeting, set to clarify interest rates. Investors are eager for indications on whether the Fed will maintain its current approach or signal a shift toward easing.

The Fed’s decisions will likely hinge on evolving inflation metrics and overall financial conditions. Collecting insights from a variety of financial indicators will be crucial for assessing which sectors will be most impacted by any changes in Fed policy.

As global developments in trade and monetary policy loom, the upcoming week promises higher volatility and renewed emphasis on macroeconomic fundamentals.