US open: Stocks slide on rising rate hike expectations

US stocks fell on Tuesday amid rising expectations the Federal Reserve will raise interest rates at its September policy meeting.

At 1452 BST, the Dow Jones Industrial Average dropped 0.16% to 18,055.83 points, the S&P 500 decreased 0.09% to 2,125.65 points and the Nasdaq declined 0.04% to 5,123.95 points.

At the same time oil prices retreated as OPEC said production from rival producers outside the organisation are going to be stronger than initially expected this year.

West Texas Intermediate crude slid 1.3% to $45.29 per barrel and Brent edged down 1.3% to $45.29 per barrel.

Hawkish remarks by Fed policymakers last week fuelled speculation of a rate increase by the US central bank at the 20-21 September policy meeting.

Last Friday Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan both argued that the case for an interest rate rise has strengthened.

Atlanta Fed President Dennis Lockhart on Monday said a "serious discussion" of whether to raise interest rates at next week's meeting was warranted given improving economic conditions.

Investors are now looking ahead to a speech by leading dove Lael Brainard at 1815 BST.

“Brainard’s comments will be of particular interest as she is the only voter on the FOMC this year,” said Craig Erlam, senior market analyst at Oanda.

“Further hawkish commentary and any indication that a rate hike is likely could trigger another wave of repricing for September and December, which in turn could see the dollar and Treasury yields on the rise again and equities coming under pressure.”

Fed Minneapolis President Neel Kashkari is also due to speak at 1800 BST.

Fed speakers are lining up ahead of Tuesday’s September policy meeting blackout.

On the corporate front, HP shares fell after it said it had agreed to buy Samsung Electronics Co’s printer business in a deal valued at $1.05bn.

Raptor Pharmaceutical shares jumped after it agreed to be bought by Horizon Pharma in a deal valued at $800m.

Praxair was in the red after it ended talks with German industrial gas company Linde about a possible merger.