US open: Stocks fall ahead of FOMC rate decision

US stocks fell on Monday as oil prices plunged and investors awaited the Federal Reserve’s latest policy announcement.

At 1430 GMT, the Dow Jones Industrial Average fell 0.16%, S&P 500 shed 0.36% and the Nasdaq dropped 0.12%.

Oil prices declined as Iran’s oil minister reportedly said the country will not join a production freeze until its own output rises to 4 million barrels a day.

West Texas Intermediate tumbled 4.2% to $36.93 per barrel and Brent crude slipped 3.5% to $39.06 per barrel at 1430 GMT.

Although Monday looks set to be a fairly quiet session, the rest of the week will be busy, with rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England due on Tuesday, Wednesday and Thursday, respectively.

The Fed is widely expected to stand pat on interest rates this week.

In December, the US central bank lifted interest rates for the first time in nearly a decade, but recent volatility in financial markets has meant that market participants have scaled back their expectations for more rate hikes this year.

“In recent weeks we have seen some encouraging data for the US economy that are likely to have bolstered the Fed’s confidence. At the same time, not all the doves are convinced and they would like to see more evidence of inflation moving back toward the 2% target,” said Rabobank.

“This suggests that we should not expect a Fed rate hike this week, but we may see a consensus forming by the June meeting. We stick to our call of two hikes this year, most likely one in June and another in December. Note that markets are now pricing in one hike this year, in June.”

In corporate news, shares in Starwood Hotels & Resorts Worldwide surged after it said it had received an unsolicited buyout bid from a consortium of companies for $76 per share in cash.

The company, which agreed a merger with Marriott International back in November, said it has received a waiver from Marriott enabling it to engage in talks with and provide diligence information to the consortium.

Chipotle Mexican Grill gained after a securities filing late on Friday showed the company’s bosses’ pay will now be linked to share price performance.

Blackstone Group slid following news over the weekend that the private equity fund is selling a portfolio of US luxury hotels to the owner of New York’s Waldorf Astoria.

In currencies, the dollar was 0.36% higher versus the pound, 0.29% firmer against the euro and down 0.16% versus the yen.