Stock futures slipped Tuesday as Wall Street looked to build on a modest rebound ahead of another rate hike from the Federal Reserve.
Futures tied to the Dow Jones Industrial Average fell 58 points, or 0.2%. S&P 500 futures shed 0.3%, and those for the Nasdaq 100 traded 0.5% lower.
The Federal Open Markets Committee kicks off its September meeting on Tuesday, and the central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.
“I think last week a lot of the work was done to reset interest rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.
“The momentum in equity markets is to the downside. … Until we establish that pattern of lower [inflation] readings, it’s going to be hard to reverse that elevated uncertainty and volatility that we are seeing,” Kourkafas added.
During a choppy trading session on Monday, stocks rose in the afternoon to snap a two-day losing streak and claw back some of their recent losses. The Dow rose 197 points, or about 0.6%. The S&P 500 and Nasdaq Composite gained roughly 0.7% and 0.8%, respectively.
However, after the market closed on Monday, Ford announced that supply chain issues would cost the automaker an extra $1 billion in the third quarter. Shares fell nearly 5% in premarket trading.
On the economic front, investors will get a fresh look at the housing market on Tuesday morning with the August reports for housing starts and building permits.
German producer prices soar 45.8% year-on-year in August
German producer price inflation hit 45.8% year-on-year in August, the federal statistics office said on Tuesday, driven by soaring energy prices.
The reading vastly outstripped a Dow Jones consensus forecast of 37.9%, while on a monthly basis, the producer price index rose 7.9% against a forecast of 1.6%.
The PPI reading excluding energy, however, was 0.4% on the month and 13% on the year.
– Elliot Smith
Sweden’s central bank launches 100 basis point rate hike, says ‘inflation is too high’
Sweden’s Riksbank on Tuesday launched a 100 basis point hike to interest rates, taking its main policy rate to 1.75%, as it warned that “inflation is too high.”
In a statement, the central bank said soaring inflation was “undermining households’ purchasing power and making it more difficult for both companies and households to plan their finances.”
– Elliot Smith
European markets choppy as Fed meeting gets underway
European markets were choppy on Tuesday, struggling to build on the previous session’s broadly higher trade.
The pan-European Stoxx 600 hovered marginally below the flatline by mid-morning, having given back opening gains of more than 0.9%. Banks added 1.5% while retail stocks fell 1.8%.
– Elliot Smith
CNBC Pro: Fund manager says the bear market is going to get ‘nasty’
Fund manager Cole Smead believes the stock market is still in the early innings of a bear market — and warns that it won’t be a “garden variety” one.
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— Zavier Ong
China keeps key lending rates unchanged
The People’s Bank of China kept its one-year and five-year loan prime rates (LPR) unchanged, in line with predictions in a Reuters poll.
The one-year loan prime rate remains at 3.65%, and the five-year rate closely tied to home mortgages stands at 4.3%. China cut both those rates last month.
— Abigail Ng
Ford under pressure after supply chain warning
Shares of Ford fell more than 4% in extended trading after the automaker warned it would take a $1 billion hit due to supply chain costs for the third quarter.
Ford set that an inability get all the parts it needs could delay delivery for more than 40,000 vehicles to dealerships. The company did say it expects those vehicles to be moved during the fourth quarter and reiterated its full-year guidance for adjusted earnings before interest and taxes.
— Jesse Pound
Stock futures open higher
U.S. stock futures opened modestly higher on Monday evening, suggesting that the late-day rise for equities may carry over into the next session.
Nasdaq 100 futures were the early leaders, but were still up just 0.2%.
— Jesse Pound
Stocks break losing streak on Monday
The three major indexes ended positive today — breaking multi-day losing streaks — as the markets came out of last week’s sell-off.
- SPDR S&P 500 and Invesco QQQ both surpassed their 30-day average volume.
- Approximately three stocks in the New York Stock Exchange advanced for every two that declined.
- Nine of 11 sectors were positive, with materials up the highest at 1.6%. Of those that fell, health care posted the greatest loss going down approximately 0.5%.
- The U.S. two-year, five-year and 10-year Treasury notes all hit highs not seen in more than a decade.
- DJ Transports gained nearly 2%, breaking a four-day losing streak. It was the largest gain of any of the major U.S. indices, which all were positive at the close.
— Alex Harring, Chris Hayes