Fed jitters smack US futures lower for second day
New York (Sept 15) US stocks were set for a second straight day of losses on Tuesday, with futures tilting lower as investors remained wary of dipping into the equity market ahead of the closely watched Federal Reserve decision on Thursday.
The investing mood was also dented by declines in Asia, where Chinese stocks took a beating and brought back concerns about slowing economic growth in the country.
Futures for the Dow Jones Industrial Average YMU5, +0.03% fell 22 points, or 0.1%, to 16,257, while those for the S&P 500 index ESU5, +0.06% dropped 1.5 points, or 0.1%, to 1,942.50. Futures for the Nasdaq 100 index NQU5, +0.05% gave up 3.55 points, or 0.1%, to 4,296.25.
The indicated losses come on the back of a downbeat session on Monday, when the S&P 500 SPX, -0.41% and Dow average DJIA, -0.38% both ended 0.4% lower.
The nervousness in the stock markets comes as the Federal Open Market Committee is set to begin a two-day meeting on Wednesday, where Fed policy makers will deliberate the first interest rate increase in nearly a decade. Analysts remain split over the likely outcome, while the fed-funds futures market is pricing in a 25% chance of rate hike on Thursday, compared with 41% a month ago.
The dollar DXY, -0.09% slipped against most major currencies on Tuesday. Expectations of a rate hike had pushed up the greenback to multiyear highs earlier in the year.
Data: Policy makers have stressed they are closely watching economic data in determining when it’s the appropriate time to start the tightening cycle. On Tuesday, they will be presented with a raft data that could feed into that assessment.
“If these data sets disappoint, it would be a clear message that a September and possibly an October rate hike are unlikely. Traders need to be very cautious in the coming days, as the ongoing uncertainty may lead to further heavy selling of global equities ahead of the Fed’s decision,” said Nour Al-Hammoury, chief market strategist at ADS Securities, in a note.
At 8:30 a.m. Eastern Time, retail-sales data are expected to show a 0.2% rise for August according to economists polled by MarketWatch, down from 0.6% in July.
At the same time, the Empire state index for September is due, forecast to have jumped back to 0.0 from -14.9 in August.
Industrial production and capacity utilization for August are slated for 9:15 a.m. Eastern, followed by July business inventories at 10 a.m. Eastern.
Movers and shakers: After the market closes, United Natural Foods Inc. UNFI, -2.00% is forecast to post fourth-quarter earnings of 72 cents a share, according to FactSet estimates.
Shares of Alcoa Inc. AA, -2.80% inched 0.4% higher premarket after the aluminum producer reached a new supply deal with Ford Motor Co. F, +0.51% that will expand the car maker’s use of aluminum in its F-150 pickup truck and other vehicles.
Other markets: China’s Shanghai Composite Index SHCOMP, -3.52% closed down 3.5%, with volatility returning to the country’s stock markets after a recent batch of disappointing data. The rest of Asia also closed mostly lower.
In Europe SXXP, +0.25% sentiment was mixed, with Germany’s DAX 30 index DAX, +0.34% up 0.4%, but the U.K.’s FTSE 100 index UKX, -0.02% down 0.3%.
Metals slumped across the board, while oil prices CLV5, +0.89% were higher.
Source: MarketWatch
