Trading in the index future suggests another lackluster session for stocks on Wednesday. Traders are likely to focus on every piece of economic evidence that drops in between now and the Sept. 19-20 Federal Open Market Committee meeting to gauge their implications for the Fed funds rate. The futures market has priced in a 93% probability of a pause at the meeting, given growing evidence of a slowdown, despite the hawkish comments from the Fed officials.
The August service sector activity readings, the Beige Book, and a couple of Federal Reserve speeches scheduled for the day, therefore assume importance.
Cues From Past Week's Trading:
The major averages pulled back on Tuesday, as the market reopened after the Labor Day holiday. A spike in oil price stirred worries about inflation and in turn, potential rate hikes, and a rebound in Treasury yields also impacted sentiment.
The major averages opened on a mixed note but fell in early trading before going about a consolidation move. The Russell 2,000 Index was the worst hit, as it plunged over 2%, reflecting the acute weakness seen among small-cap stocks.
Utilities, real estate, financial, material, and industrial stocks served as drags in the session.
US Index Performance On Tuesday
Index Performance (+/-) Value Nasdaq Composite -0.08% 14,020.95 S&P 500 Index -0.42% 4,496.83 Dow Industrials -0.56% 34,641.97 Russell 2000 -2.10% 1,880.45
Analyst Color:
Despite the rapid rise in interest rates and the fall in bond prices, there's ...