Stock futures were flat Tuesday morning as Wall Street looked to build on a modest recovery ahead of another rate hike by the Federal Reserve.
Futures linked to the Dow Jones Industrial Average were marginally lower. S&P 500 futures lost 0.05% and those for the Nasdaq 100 also fell 0.03%.
The Federal Open Markets Committee begins its September meeting on Tuesday, and central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have fallen in recent weeks as comments from Fed Chair Jerome Powell and a hotter-than-expected August CPI report prompted traders to brace for even higher rates until inflation cools.
“I think a lot of work was done last week to reset interest rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.
“The momentum in the stock markets is pointing downwards. …Until we establish this downtrend pattern [inflation] readings, it will be difficult to reverse this increased uncertainty and volatility that we are seeing,” added Kourkafas.
During a choppy trading session on Monday, shares rose in the afternoon to break a two-day losing streak and erase some of their recent losses. The Dow rose 197 points, or about 0.6%. The S&P 500 and Nasdaq Composite gained about 0.7% and 0.8%, respectively.
However, after the market closed on Monday, Ford announced supply chain issues would cost the automaker an additional $1 billion in the third quarter. Shares fell 4.5% in extended trading.
On the economic front, investors will get a fresh look at the housing market Tuesday morning with August reports on housing starts and building permits.