Traders on the ground of the NYSE
Source: NYSE
Stock futures slipped Tuesday evening as investors looked ahead to the Federal Reserve’s Wednesday meeting.
Futures tied to the Dow Jones Industrial Average shed 48 points or 0.14%. S&P 500 futures and Nasdaq Composite futures were down 0.20% and 0.37%, respectively.
The moves come after stocks jumped to finish January on a powerful note. The Dow Jones Industrial Average ended the day nearly 369 points higher, rising by 1.09%. The S&P 500 gained 1.46% to cap its best January performance since 2019. The tech-heavy Nasdaq Composite rose 1.67%, its best January performance in 22 years.
On Wednesday, the Federal Reserve will announce how much it’s increasing rates of interest in its latest effort to tame high inflation. Markets expect a 25 basis point, or 0.25 percentage point, bump from the central bank. On Tuesday, the employment cost index, a measure of wage increases, showed compensation rose 1% within the fourth quarter, lower than the 1.1% estimate by Dow Jones.
Still, traders could also be getting ahead of themselves in expecting a more dovish tone from the Fed, or on the lookout for signs that a pause in hikes or perhaps a pivot is coming soon.
“Aggressive tightening in 2022 has led to signs of decelerating inflation but from levels that remain unacceptably high,” Ron Temple, chief market strategist at Lazard said in a Tuesday note. “With a 25bps hike already discounted by markets, Powell’s task is to unambiguously signal the Fed’s commitment to tame inflation.”
The Federal Reserve will announce its decision Wednesday afternoon, followed by Chairman Jerome Powell’s comments.
Earnings season continues as well. Peloton and Meta Platforms are scheduled to report quarterly results on Wednesday.
