Stock futures open slightly lower ahead of Federal Reserve update
U.S. stock futures opened slightly lower Tuesday night after the major averages tried but failed to rebound from Monday’s Evergrande-led sell-off in the regular session.
Dow Jones Industrial Average futures fell 30 points, or 0.09%. S&P 500 futures and Nasdaq 100 futures fell 0.13% and 0.18%, respectively.
In regular trading the Dow lost 50.63 points, or 0.15%. The S&P 500 shed about 0.1% following its worst day since May on Monday. The Nasdaq Composite rose 0.2%.
The global markets continued to digest the news of the possible default of the embattled Chinese property developer Evergrande. At its high point, the Dow Jones Industrial average reclaimed more than half of Monday’s losses but those gains eventually evaporated in what ended up being a volatile session.
The Dow and S&P looked poised to snap a three-day losing streak in the late afternoon but turned lower into the close, finishing in the red for the fourth day in a row and the fifth of the past six sessions. The Dow is down 4% in September while the S&P is down 3.7%.
“In a way the markets being flat today is actually a pretty good outcome,” Fundstrat’s Tom Lee said on CNBC’s “Fast Money” Tuesday night. “We’re still in a position where ultimately stocks are going to rally hard off this, because unless Evergrande is going to cause a real seismic effect on the U.S. economy, the U.S. fundamentals are in good shape.”
The Federal Reserve will conclude its two-day meeting on Wednesday and release a policy statement with economic and interest rate forecasts. Chairman Jerome Powell is expected to speak to the media at 2:30 p.m. ET.
Investors expect to hear details about when exactly the central bank plans to begin tapering its bond buying. Powell has previously said it could begin as soon as this year. That may not necessarily happen, however.
“I think they’re going to lay out that they had a discussion on tapering. I don’t think they’re going to provide any details,” BlackRock chief investment officer of global fixed income Rick Rieder told CNBC. “I think they’re going to provide a framework where they can start doing it in November or December.”
General Mills and Blackberry will report quarterly earnings Wednesday.
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