Technical data

Stock futures flat ahead of Federal Reserve’s expected interest rate hike

Stock futures were flat on Tuesday evening as traders anticipate Wednesday’s announcement of the Federal Reserve’s interest rate hike.

Dow Jones Industrial Average futures rose 12 points, or 0.04%. S&P 500 and Nasdaq 100 futures rose 0.07% and 0.07% respectively.

Shares fell on the first day of the Federal Open Market Committee meeting on Tuesday. The Dow Jones Industrial Average lost 313.45 points, or 1.01%. The S&P 500 and the Nasdaq Composite fell 1.13% and 0.95% respectively.

Yields also jumped on Tuesday. The yield on 2-year U.S. Treasuries rose to 3.99%, its highest level since 2007. The 10-year Treasury yield briefly touched 3.6%, the highest since 2011.

Investors expect the central bank to make its third straight rate hike of 0.75 percentage points on Wednesday to tame high inflation. A higher-than-expected consumer price index in August and hawkish comments on rate hikes from Fed leaders weighed on stocks, with more pressure likely as the central bank continues to fight inflation .

“We’ll never really know if the stock market lows are for the year without successfully testing the June lows,” John Lynch, chief investment officer at Comerica Wealth Management said in a Tuesday note. “Certainly the recent technical weakness in stock prices must now be met with the determination of monetary policy makers in their fight against inflation.”

He added that the third-quarter earnings season could also add headwinds for stock prices if they show further margin erosion for U.S. companies.

Investors will also be watching earnings from Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing home sales will also be released Wednesday morning.