Stock futures were flat on Tuesday morning as Wall Street hoped for a modest rally ahead of another rate hike by the Federal Reserve.
Futures linked to the Dow Jones Industrial Average were slightly lower. S&P 500 futures fell 0.05%, while the Nasdaq 100 also lost 0.03%.
The Federal Open Market Committee begins its September meeting on Tuesday, and the central bank governor is expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have fallen in recent weeks as comments from Federal Reserve Chairman Jerome Powell and a surprise consumer price index report for August prompted traders to brace for higher interest rates until inflation cools.
“I think a lot of work was done last week to reset rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.
“The momentum in the stock market is down. …until we build this down pattern [inflation] readings, it’s hard to reverse the elevated uncertainty and volatility we’ve seen,” Kulcafas added.
Stocks rose in the afternoon during Monday’s choppy trading session, snapping a two-day losing streak and recouping some of their recent losses. The Dow rose 197 points, or about 0.6%. The S&P 500 and Nasdaq Composite rose about 0.7% and 0.8%, respectively.
However, after the market closed on Monday, Ford announced that supply chain issues will cost the automaker an additional $1 billion in the third quarter. Shares fell 4.5% in extended trading.
On the economic front, investors will take a fresh look at the housing market Tuesday morning with reports on housing starts and building permits for August.