U.S. stock futures lean higher after entering bear market, as Fed decision looms

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U.S. stock market futures rose on Tuesday, a day after entering a bearish market ahead of what is expected to be one of the Federal Reserve’s biggest interest rate hikes in decades.

What is happening
  • Dow Jones Industrial Average YM00 futures
    + 0.44%
    increased 116 points, or 0.4%, to 30,617.

  • Futures of the S&P 500 ES00,
    + 0.59%
    gained 19.25 points, or 0.5%, to 3,773.

  • Futures on the Nasdaq 100 NQ00,
    + 0.86%
    increased 89.75 points, or 0.8%, to 11,417.

On Monday, the Dow Jones Industrial Average DJIA,
fell 876 points, or 2.79%, to 30,517, the S&P 500 SPX,
decreased 151 points, or 3.88%, to 3,750, and the Nasdaq Composite COMP,
it dropped 531 points, or 4.68%, to 10,809.

Over the past four days, the S&P 500 has fallen 9.9%, the worst drop in that period since March 23, 2020, when the United States first faced coronavirus pandemic. The 22% drop now from the close of 2022 put the index in a bearish market on Monday.

Related: What investors need to know about the S&P 500 bear market

What is driving the markets

The Federal Reserve’s two-day interest rate fixation meeting begins Tuesday, with big questions about how the central bank will respond to the fastest inflation in four decades. There is talk every time the Fed raises at least 75 basis points, a move that seemed remote even last week. How the Fed will streamline future interest rate activity is also a big question.

Mark Haefele, investment director of UBS’s global wealth management, said the risks of a Fed-induced recession have increased and that the chances of a recession in the next six months have increased.

“Wednesday’s FOMC meeting, which includes the latest Fed economic forecasts, is one of the most significant in recent history and will be critical to the outlook for financial markets. Volatility is likely to remain high over the next few years. days, as investors consider the potential need to recalibrate their assumptions based on Fed decisions, “he said.

The most important corporate news came from the database giant Oracle ORCL,
which rose 13% in pre-market trading after beating earnings and revenue estimates for its fourth fiscal quarter, even though its first-quarter earnings orientation was below Wall Street estimates.

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