US pre-open: Futures lower ahead of FOMC decision
Wall Street futures were in the red ahead of the bell on Tuesday as market participants prepared for the Federal Reserve's two-day policy meeting to kick off.
As of 1225 BST, Dow Jones futures were down 0.35%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.24% and 0.26% weaker, respectively.
The Dow closed 69.05 points higher on Monday as major indices clinched their first winning day in three as the central bank's interest rate decision moved closer.
This morning's pre-market moves come as investors brace for the outcome of the Fed's June policy meeting on Wednesday, with an interest rate policy decision and a subsequent press conference set to feature chairman Jerome Powell. Traders have already largely priced in expectations that the benchmark borrowing rate will remain unchanged.
Finalto's Neil Wilson pointed out that it was the time to "watch the dot plot" ahead of tomorrow's rate decision.
"In March it signalled three rate cuts this year. By tomorrow it could be down to one. I think it comes down to a case of delaying the cuts rather than raising the neutral rate (that may come later). The NFP data on Friday was suspect. I think they are viewing slowing economic growth and higher unemployment is what they are looking at now – unemployment has risen from 3.4% to 4.0%. Q1 GDP revisions were not great, consumer spending down, Q2 is not shooting the lights out. The NFP data was a bit of a red herring – the case for cutting is building. The Fed wants to stay ahead of the curve this time and the easing bias remains. Remember inflation = good for the deficit," said Wilson.
On the macro front, the National Federation of Independent Business' small business optimism index rose to 90.5 in May, ahead of expectations of 89.8 and up from 89.7 in the previous month for its highest reading in the last five. 22% of owners reported that inflation was their single most important problem in operating their business, unchanged from April and the top business problem among owners.
Elsewhere, OPEC's monthly market report will be released at 1300 BST.
In the corporate space, Oracle and Rubrik will report earnings after the close.
Reporting by Iain Gilbert at Sharecast.com