Stock futures slipped slightly on Wednesday morning as traders look forward to the upcoming Fed rate hike announcement.
Dow Jones Industrial Average futures were down 57 points, or 0.19%. S&P 500 and Nasdaq 100 futures rose 0.21% and 0.22%, respectively.
Stocks fell on Tuesday On the first day of the Federal Open Market Committee meeting. The Dow Jones Industrial Average fell 313.45 points, or 1.01%. The S&P 500 and Nasdaq Composite were down 1.13% and 0.95%, respectively.
Yields also jumped on Tuesday. The yield on two-year US Treasuries rose to 3.99%, the highest level since 2007. The yield on 10-year Treasuries briefly reached 3.6%, the highest level since 2011.
Investors expect the central bank to deliver them on Wednesday Third straight rise of 0.75 percentage points to tame high inflation. A higher-than-expected CPI reading in August and hawkish comments about rate hikes from Fed leaders weighed on stocks, and there is likely to be more pressure going forward as the central bank continues to battle inflation.
“We won’t really know if the stock market lows this year without a successful test of the June lows,” John Lynch, chief investment officer at Comerica Wealth Management, said in a Tuesday note. “Sure, the recent technical weakness in stock prices must now address the determination of monetary policymakers in their fight against inflation.”
He added that the third-quarter earnings season could also add headwinds to stock prices if they show further erosion in US corporate margins.
Investors will also watch earnings for Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing home sales will also be released on Wednesday morning.
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