Stock futures were flat on Tuesday morning as Wall Street looked to take advantage of a modest rally ahead of another rate hike by the Federal Reserve.
Futures tied to the Dow Jones Industrial Average were slightly lower. S&P 500 futures fell 0.05%, and Nasdaq 100 futures also fell 0.03%.
The Federal Open Market Committee begins its September meeting on Tuesday and central banks are expected to announce a rate hike of 0.75 percentage points on Wednesday. Stocks have fallen in recent weeks as comments from Fed Chairman Jerome Powell and an unexpectedly warm consumer price index report for August sent traders bracing for even higher rates until inflation cools down.
“I think a lot of the work was done last week to reset interest rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.
“Momentum in the equity markets is to the downside…Until we establish this bearish pattern [inflation] readings, it will be difficult to reverse this high uncertainty and volatility that we are seeing,” Kourkafas added.
In a choppy trading session on Monday, shares rose in the afternoon to snap a two-day losing streak and recoup 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 that 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 review the housing market on Tuesday morning with August reports on housing starts and building permits.