U.S. Stocks May Lack Direction Ahead Of Fed Decision

(RTTNews) - Following the modest pullback seen in the previous session, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.

Traders may be reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed is widely expected to lower interest rates by another quarter point, there is considerable uncertainty about the longer-term outlook for rates.

CME Group's FedWatch Tool is currently indicating an 87.4 percent chance the Fed will lower rates by a quarter point on Wednesday but a 67.5 percent chance the central bank will leave rates unchanged in January.

Traders are likely to pay close attention to the wording of the Fed's accompanying statement as well as Fed Chair Jerome Powell's post-meeting press conference for clues about the likelihood further rate cuts.

Shortly after the start of trading, the Labor Department is scheduled to release its report on job openings in the month of October.

Stocks moved to the upside at the start of trading on Monday but moved lower over the course of the trading session. The major averages pulled back off their early highs and into negative territory.

The major averages staged a short-lived recovery attempt in mid-day trading but all ended the day in the red. The Dow fell 215.67 points or 0.5 percent to 47,739.32, the Nasdaq edged down 32.22 points or 0.1 percent to 23,545.90 and the S&P 500 decreased 23.89 points or 0.4 percent to 6,846.51.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Hong Kong's Hang Seng Index slumped by 1.3 percent and China's Shanghai Composite Index fell by 0.4 percent, although Japan's Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.3 percent, the U.K.'s FTSE 100 Index is just below the unchanged line and the French CAC 40 Index is down by 0.6 percent.

In commodities trading, crude oil futures are slipping $0.05 to $58.83 a barrel after plummeting $1.20 to $58.88 a barrel on Monday. Meanwhile, after slumping $25.30 to $4,217.70 an ounce in the previous session, gold futures are rising $11.80 to $4,229.50 an ounce.

On the currency front, the U.S. dollar is trading at 156.44 yen compared to the 155.91 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1632 compared to yesterday's $1.1636.