U.S. index futures rose slightly in pre-market trading on Tuesday, with major corporate earnings and the start of the Federal Reserve’s policy meeting in focus. The Fed’s two-day meeting, starting today, will be crucial for future rate cut expectations.
At 4:59 AM, Dow Jones futures (DOWI:DJI) rose 30 points, or 0.07%. S&P 500 futures gained 0.15%, and Nasdaq-100 futures advanced 0.19%. The 10-year Treasury yield was 4.183%.
In the commodities market, oil prices continued to fall, reflecting concerns over weakened demand in China, the world’s largest oil importer. Despite rising tensions in the Middle East, the market focused more on the Chinese economic slowdown and expected lower global demand. West Texas Intermediate crude for September fell 0.21% to $75.65 a barrel. Brent crude for September fell 0.20% to near $79.62 a barrel.
In Tuesday’s U.S. economic agenda, the S&P Case-Shiller home price index for 20 cities will be released at 9:00 AM. At 10:00 AM, consumer confidence for July will be released, expected at 99.5, slightly down from 100.4. Simultaneously, June job openings will be revealed, with projections pointing to 8.0 million positions, slightly below the previous month’s 8.1 million.
Asia-Pacific markets faced declines as the Bank of Japan began a monetary policy meeting. The Bank of Japan is expected to announce plans on Wednesday to reduce bond purchases and discuss a possible rate hike to 0.1%, above the current range of 0% to 0.1%, seeking to adjust its monetary policy after a decade of stimulus. Japan’s unemployment rate was 2.5%, slightly below expectations in July. The Nikkei 225 rose 0.15%, but the Topix fell 0.19%.
In South Korea, July exports are expected to have increased by 18.4% month-over-month, the fastest pace in 26 months, driven by robust chip sales and a recovery in China, according to Reuters. South Korea’s Kospi fell 0.99%, while the Kosdaq fell 0.52%. Hong Kong’s Hang Seng retreated 1.37%.
Australia’s S&P/ASX 200 fell 0.46%. Fortescue (ASX:FMG) saw a 10.27% decline due to a discounted share offer. In Singapore, state investor Temasek (TG:A2SANF) plans to allocate up to $30 billion in U.S. investments over the next five years, focusing on sectors such as healthcare, financial services, and technology.
In China, the Shanghai Composite decreased by 0.43%, with expectations that July factory activity will shrink for the third consecutive month, with the PMI projected at 49.3, down from June’s 49.5, reflecting a persistent real estate crisis and weak domestic demand.
European markets advanced as investors awaited decisions from the Fed and the Bank of England. Corporate earnings continue to influence the market. Among individual stocks, Diageo (LSE:DGE) shares plummeted, Standard Chartered (LSE:STAN) shares rose with its share buyback, and BP (LSE:BP.) shares advanced after announcing a dividend increase.
On Monday, U.S. markets showed modest fluctuations, with the Dow Jones falling 0.12% to 40,539.93 points, while the S&P 500 rose 0.08% to 5,463.54 points and the Nasdaq grew 0.07% to 17,370.20 points. Investor sentiment was hesitant due to anticipation of the Fed meeting and upcoming earnings reports from tech giants like Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN). The CME Group’s FedWatch tool showed an 89.6% chance of a 0.25 percentage point rate cut by the Fed in September and a 10.1% chance of a 0.5-point cut.
In Tuesday’s quarterly report releases, before the market opens, SoFi (NASDAQ:SOFI), PayPal (NASDAQ:PYPL), Pfizer (NYSE:PFE), BP plc (NYSE:BP), Procter & Gamble (NYSE:PG), Merck (NYSE:MRK), Corning (NYSE:GLW), JetBlue (NASDAQ:JBLU), Leidos Holdings (NYSE:LDOS), Enterprise Products Partners L.P. (NYSE:EPD), and more will report.
After the close, numbers are expected from Advanced Micro Devices (NASDAQ:AMD), Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX), Arista Networks (NYSE:ANET), Pinterest (NYSE:PINS), First Solar (NASDAQ:FSLR), Caesars (NASDAQ:CZR), Lemonade (NYSE:LMND), Electronic Arts (NASDAQ:EA), GeneDx Holdings (NASDAQ:WGS), among others.