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U.S. stock futures on Tuesday pointed to a weak finish to a strong month ahead of a key Federal Reserve rate decision and more corporate earnings.
What’s happening
-
Dow Jones Industrial Average futures
YM00,
-0.34%
fell 92 points, or 0.3%, to 33693. -
S&P 500 futures
ES00,
-0.28%
dropped 12 points, or 0.3%, to 4021. -
Nasdaq 100 futures
NQ00,
-0.39%
decreased 51 points, or 0.4%, to 11917
On Monday, the Dow Jones Industrial Average
DJIA,
fell 261 points, or 0.77%, to 33717, the S&P 500
SPX,
declined 53 points, or 1.3%, to 4018, and the Nasdaq Composite
COMP,
dropped 228 points, or 1.96%, to 11394.
The S&P 500 has gained nearly 5% this month.
What’s driving markets
The Federal Open Market Committee kicks off its two-day meeting on Tuesday, with near universal expectations for a quarter-point rate hike, with the uncertainty focused on the commentary to be delivered in the statement and the press conference with Chair Jerome Powell.
“We doubt that the Fed will deliver a dovish surprise at its meeting, but the imminent end of interest rate hikes is nevertheless positive for risk appetite,” said Willem Sels, global chief investment officer at HSBC Global Private Banking & Wealth. “That said, the main beneficiaries lie outside of the U,S,, in emerging markets, where borrowing costs are already declining as U.S. Treasury yields have peaked and the dollar is falling.”
The U.S. dollar index
DXY,
is down 11% from its late September peak. The yield on the 10-year Treasury
TMUBMUSD10Y,
has fallen nearly 70 basis points from its late October peak of 4.23%.
The economics calendar includes the employment cost index, an important though lagging measure of wage pressure.
Shares of Pfizer
PFE,
Exxon Mobil
XOM,
and Caterpillar
CAT,
fell in premarket trade after their earnings results, though General Motors
GM,
shares rallied. McDonald’s
MCD,
also is set to report results.
