Stock market today: futures slip ahead of Amazon earnings and a key Fed update
Stock futures retreated on Tuesday as investors braced for an update from the Fed that could dash hopes of interest-rate cuts this year.
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- US stock futures retreated on Tuesday as Wall Street awaited key earnings reports and a Fed update.
- Amazon, Eli Lilly, McDonald's, and Starbucks are among the companies set to report earnings later.
- The Fed will weigh in on inflation and the outlook for interest rates on Wednesday.
Stocks drifted lower in premarket trading on Tuesday as investors held their breath for marquee earnings reports and a critical update from the Federal Reserve.
S&P 500 and Dow Jones Industrial Average futures were down 0.1% shortly after 5.30 a.m. ET, while Nasdaq 100 futures traded marginally lower.
The key 10-year Treasury yield rose by about 0.2% to 4.64%. The US Dollar Index — which tracks the buck's value against a basket of foreign currencies — advanced 0.3% to 105.9 points.
The Fed is scheduled to begin its two-day meeting later. In January, the central bank was widely expected to cut interest rates significantly this year as inflation appeared to be normalizing. However, stubborn price growth has tempered Wall Street's hopes of a rate cut in the months ahead.
"We are preparing to hear Jerome Powell ask for more patience and for more time to abate inflation," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, in a morning note.
"If that's the case, we could see a further meltdown in Fed rate cut expectations. The next stop is no rate cut in 2024, which would be a cold shower for the bulls," she added.
While companies' financial reports have broadly beaten expectations this earnings season, stocks could suffer if the Fed sounds the alarm on inflation and says it's eyeing further rate increases.
"If the Fed expectations turn undesirably hawkish, we could see the equity rally stall," Ozkardeskaya said.
Amazon, Eli Lilly, Coca-Cola, McDonald's, and Starbucks are all expected to report earnings later. The key data releases include an update to the S&P Case-Shiller home price index and new consumer confidence figures.