If you’ve spent more than five minutes staring at an S&P 500 futures chart, you’ve probably noticed that it doesn’t always move in a slow, steady, logical way. One minute it’s grinding higher in a sleepy range, and the next it’s ripping 20 points in under a minute — often with no obvious “technical” reason. What’s going on?
Well, many of those large bursts aren't random, actually. They're frequently associated with economic events — planned releases, policy statements, and other times when fresh information arrives on the market and immediately alters the way that traders value stocks.
For an at-home retail trader, those events can be problematic. But for prop traders, who trade within firms with strict risk guidelines, evaluation periods, and tight performance standards, knowing what events move S&P futures (and precisely how to trade them) can be the difference between passing an evaluation or blowing the account on day one.
So, let’s break this down. We’ll look at the key economic events that tend to make the E-mini and Micro E-mini S&P 500 futures dance, why they matter, and how prop traders — especially those trading with evaluation rules hanging over their heads — position themselves before, during, and after the data hits.
Why Economic Events Matter for S&P Futures
S&P 500 futures are really a live prediction market for the worth of the entire stock market. They respond to:
- Interest rate expectations
- Economic growth expectations
- Corporate earnings potential
- Risk appetite (or absence thereof)
Economic news puts fresh information into that mixture. Whether it's inflation numbers indicating the Fed will raise rates more aggressively, or a jobs report indicating a weakening economy, such releases can immediately alter the dynamic between buyers and sellers.
In a prop firm context, the stakes are even higher. You’re not just trading your own money — you’re trading with house capital (or trying to earn that privilege). That means risk controls, drawdown limits, and sometimes outright restrictions on trading during high-volatility events.
The Big Market Movers: Key Economic Events to Watch
The events that nine times out of ten will make the S&P jump, fall, or spin around like it's been drinking too much coffee.
FOMC Meetings and Federal Reserve Announcements
One event that will put S&P futures into hyperspace is a Fed meeting. The Federal Open Market Committee (FOMC) convenes about every six weeks to determine interest rates and monetary policy.
Why it matters:
The S&P 500 is highly susceptible to interest rates. When rates rise, they can imply lower future profits for corporations (discounted cash flow arithmetic), more stringent lending terms, and a general reduction in risk-taking. The opposite occurs with falling rates.
How prop traders do it:
- Pre-meeting: Most prop traders flatten or decrease size ahead of time to not get run over by the initial volatility.
- During: Some scalp the initial reaction, but most experienced traders hold out for the second move. The initial spike usually reverses hard.
- After: The press conference (typically 30 minutes following the statement) may be even wilder than the announcement itself.
Pro tip for testing: If your prop house has a maximum loss limit per day, Fed day is an excellent time to exercise self-control. Most traders lose challenges on these days by getting in too quickly.
Nonfarm Payrolls (Jobs Report)
Published on the first Friday of each month at 8:30 AM ET, the NFP report informs us of how many jobs were gained or lost within the U.S. economy.
Why it matters:
Healthy job growth may signal the economy is too hot — potentially driving the Fed to more restrictive policy. Softness could portend futures trading issues, leading to rate reductions.
How prop traders do it:
- Pre-release: Almost all remain flat on the number's eve. The first reaction can move ES 20+ points in seconds.
- Post-release: If the number confirms an existing trend (e.g., strong data in a hawkish Fed environment), traders will look for continuation setups. If it’s a surprise, they might fade the initial overreaction.
- Risk tip: If you’re in an evaluation, consider letting the dust settle for 5–10 minutes before jumping in. The chop right after NFP has ruined many trading days.
Consumer Price Index (CPI) and Producer Price Index (PPI)
Inflation numbers take center stage over the last few years. CPI and PPI reports can lead to violent S&P futures moves, particularly if inflation is overheating and the Fed is sitting up closely.
Why it matters:
Above-consensus inflation = increased likelihood of rate hikes = bad for stocks. Below-consensus inflation = hope for rate cuts or at least a pause = good.
How prop traders do it
- CPI days tend to experience huge gaps at the open.
- Aggressive traders may take positions ahead of the release based on "whisper numbers" or sentiment, but it's not advisable.
- Conservative prop traders wait for the market to decide direction and then follow the trend.
GDP Reports
Gross Domestic Product (GDP) is the most comprehensive measure of economic activity. It's published quarterly (with two revisions later).
Why it matters:
A booming GDP may seem wonderful, but in an inflationary context, it's actually bearish for stocks because it continues to put pressure on the Fed to remain hawkish. Weak GDP can cause recession fears — unless it's weak enough to call for rate cuts.
How prop traders do it:
GDP does not typically trigger the same one-minute fireworks as CPI or NFP but has the potential to set the tone for the day or week.