Following the sharp pullback seen in the previous session, stocks may see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 104 points.
Concerns about the outlook for monetary policy may continue to weigh on the markets, as the Federal Reserve’s two-day meeting gets underway.
With inflation remaining at an elevated rate, the Fed is widely expected to accelerate its timetable for reducing bond purchases.
Many traders expect the Fed to begin raising interest rates shortly after bringing its asset purchase program to a halt.
Potentially adding to concerns about monetary policy, the Labor Department released a report showing producer prices increased by more than expected in the month of November.
The report said the producer price index for final demand advanced by 0.8 percent in November after climbing by 0.6 percent in October. Economists had expected producer prices to rise by 0.5 percent.
With the stronger than expected monthly price growth, the annual rate of producer price growth accelerated to 9.6 percent in November from 8.8 percent in October.
The Labor Department said the year-over-year spike reflected the largest advance since 12-month data were first calculated in November 2010.
Stocks moved notably lower during trading on Monday, giving back ground following the rally seen on Wall Street last week. The major averages all showed significant moves to the downside, with the tech-heavy Nasdaq leading the drop.
The Nasdaq and the S&P 500 fell to new lows for the session going into the close of trading. The Dow slumped 320.04 points or 0.9 percent to 35,650.95, the Nasdaq plunged 217.32 points or 1.4 percent to 15,413.28 and the S&P 500 tumbled 43.05 points or 0.9 percent to 4,668.97.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index dove by 1.3 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.3 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.
In commodities trading, crude oil futures are slumping $0.89 to $70.40 a barrel after falling $0.38 to $71.29 a barrel on Monday. Meanwhile, after rising $3.50 to $1,788.30 an ounce in the previous session, gold futures are sliding $14 to $1,774.30 an ounce.
On the currency front, the U.S. dollar is trading at 113.52 yen compared to the 113.54 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1309 compared to yesterday’s $1.1284.
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