Stock futures rose slightly on Tuesday morning as Wall Street appeared to be building on a modest recovery ahead of another interest rate hike by the Federal Reserve.
Futures tied to the Dow Jones Industrial Average rose 61 points, or 0.2%. S&P 500 futures rose 0.22%, and those for the Nasdaq 100 rose 0.27%.
The Federal Open Markets Committee begins its September meeting on Tuesday, and central bank governors are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have fallen in recent weeks as comments from Fed Chairman Jerome Powell and an unexpectedly warm consumer price index report in August prompted traders to brace for even higher prices until inflation cools.
“I think last week a lot of the work was done to reset interest rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.
“Momentum in equity markets is on the downside … until we establish that pattern lower [inflation] measurements, it will be difficult to reverse the increased uncertainty and volatility that we are seeing, Kourkafas added.
In choppy trading on Monday, shares rallied in the afternoon to snap a two-day losing streak and claw back some of the recent losses. The Dow rose 197 points, or about 0.6%. The S&P 500 and Nasdaq Composite rose about 0.7% and 0.8%, respectively.
However, after the market closed on Monday, Ford announced that supply chain issues would cost the automaker an extra $1 billion in the third quarter. Shares fell 4.5% in extended trading.
On the economic front, investors will get a fresh look at the housing market on Tuesday morning with the August reports for housing starts and building permits.