Stock futures were subdued Wednesday morning as traders eye the imminent announcement of a rate hike by the Federal Reserve.
Dow Jones Industrial Average futures were up 24 points, or 0.08%. S&P 500 and Nasdaq 100 futures were roughly flat.
Stocks fell on Tuesday, the first day of the Federal Open Market Committee meeting. The Dow Jones Industrial Average lost 313.45 points, or 1.01%. The S&P 500 and Nasdaq Composite fell 1.13% and 0.95%, respectively.
Yields also rose on Tuesday. The 2-year US Treasury yield rose to 3.99%, the highest since 2007. The 10-year Treasury yield briefly hit 3.6%, the highest since 2011.
Investors are expecting the central bank to deliver its third straight 0.75 percentage point rate hike on Wednesday in a bid to curb high inflation. A higher-than-expected CPI in August and hawkish comments on rate hikes from Fed executives weighed on stocks, with further pressure likely as the central bank continues to fight inflation.
“We’ll never really know if stock market bottoms are coming this year without successfully testing the June bottoms,” said John Lynch, chief investment officer at Comerica Wealth Management, in a statement Tuesday. “Of course, the recent technical weakness in stock prices is now having to contend with the determination of policymakers in their fight against inflation.”
He added that the third-quarter earnings season could also bring headwinds for stock prices if they show further margin erosion for US companies.
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.