Stock futures were subdued Wednesday morning as traders looked ahead to an upcoming rate hike from the Federal Reserve.
The Dow Jones Industrial Average and S&P 500 were roughly flat, while Nasdaq 100 futures edged up 0.04%.
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 lost 1.13% and 0.95%, respectively.
Yields also rose sharply on Tuesday. The 2-year U.S. Treasury yield soared to 3.99%, its highest level since 2007. The 10-year yield briefly touched 3.6%, the highest level since 2011.
Investors expect the central bank to raise interest rates for the third time in a row by 0.75 percentage points on Wednesday to curb high inflation. Stocks were pressured by a higher-than-expected consumer price reading in August and hawkish comments from the Federal Reserve leader on raising interest rates, with the central bank likely to face more pressure ahead as the central bank continues to fight inflation.
“Without a successful test of the June low, we’ll never really know if the stock market is at a low this year,” John Lynch, chief investment officer at Comerica Wealth Management, said in a note Tuesday. To be sure, the recent technical weakness in equity prices must now be countered by the determination of monetary policymakers to fight inflation.”
He added that it could also weigh on the stock price if third-quarter earnings showed U.S. companies’ margins falling further.
Investors will also be watching earnings from Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing home sales will also be released Wednesday morning.