MW: U.S. stocks poised for losses as oil slides again
Stock futures pointed to a rough start for Wall Street on Tuesday, with oil prices under pressure and investors growing nervous ahead of the outcome of the Federal Open Market Committee’s meeting.
Dow Jones Industrial Average futures YMM6, -0.41% fell 78 points, or 0.5%, to 17,049, while S&P 500 index futures ESM6, -0.51% lost 10.70 points, or 0.5%, to 1,998.25. Nasdaq-100 futures NQM6, -0.30% fell 19.25 points, or 0.4%, to 4,338.75.
The Dow industrials DJIA, +0.09% logged a new closing high for 2016 on Monday. But the S&P 500 index SPX, -0.13% finished slightly lower, as energy stocks tracked a sharp slump in oil prices.
The pressure remained on oil Tuesday, with U.S. crude falling 95 cents, or 2.6%, to $36.22 a barrel. Some analysts said that move was likely pressuring U.S. stock futures. In Europe, oil companies led the Stoxx Europe 600 index SXXP, -0.96% down 0.6%.
In Asia, Chinese stocks rose modestly, but the Nikkei 225 index NIK, -0.68% lost 0.7%. The Bank of Japan left its monetary policy unchanged, but cut its economic view and paid more lip service to overseas problems, such as European debt and U.S. economic issues. For some analysts, the door is now open to more BOJ easing.
The dollar USDJPY, -0.76% was down sharply against the yen in the wake of the Bank of Japan decision. Gold prices GCJ6, -0.74% were under pressure, down $10.90, or 0.9%, to $1,234.20 an ounce.
Data deluge and central banks
The Federal Reserve’s two-day meeting kicks off Tuesday, with a policy decision due Wednesday, followed by a news conference with Fed Chairwoman Janet Yellen. Most expect the Fed won’t make any change to monetary policy, and many economists expect just one more interest-rate increase is coming this year, in June.
While the economic backdrop has improved, the possibility of another rate increase makes investors wary about holding riskier assets such as stocks, said Naeem Aslam, chief market analyst at Ava Trade, in a note.
“Yellen may have to play hard to convince the market that another rate increase is not possible this year and they are still truly data dependent and at the benevolence of the world economic health,” he said.
Read: Caroline Baum says Fed officials talk themselves into a corner
A heavy load of economic data is coming Tuesday, led by a reading on retail sales at 8:30 a.m. Eastern. Retail sales are forecast to turn negative, with economists polled by MarketWatch forecasting a 0.2% fall in headline prices for February from a 0.2% rise in January.
Producer prices for February are scheduled for release at the same time, along with the Empire state manufacturing index for March, which offers a gauge of business conditions in the New York region. Then at 10 a.m. Eastern, a home builders index for March and business inventories for January are due.
