Stocks are expected to exhibit some early vulnerabilities on Tuesday, as they retreat following Monday's gains. Presently, major index futures suggest a downward opening, with S&P 500 futures declining by 0.4 percent.
Investors might be inclined to secure profits from the previous session's uptick, which witnessed the Nasdaq achieving a record close, fueled by a surge in tech stocks.
Conversely, the Dow Jones Industrial Average experienced a decline for the eighth straight session on Monday and is likely to face further pressure as trading begins.
The bearish sentiment on Wall Street can be attributed to anticipation surrounding the Federal Reserve's monetary policy decision scheduled for Wednesday.
The consensus is that the Fed will proceed with interest rate cuts, with the CME Group's FedWatch Tool indicating a 97.1 percent probability of a 25 basis point rate reduction.
Market participants will keenly scrutinize the Fed's statement and the updated economic projections, especially concerning future rate forecasts.
Recent inflation data, indicating persistent inflationary pressures, has sparked fears that the Fed might adopt a more gradual approach to rate cuts next year than previously predicted.
Ahead of the market's opening, the Federal Reserve plans to release its industrial production data for November. Expectations are set for a 0.3 percent rise, rebounding from October's 0.3 percent decline.
After a subdued performance last Friday, stocks generally rose on Monday, led by the tech-heavy Nasdaq, which surged to a new peak.
Although the Nasdaq retreated slightly from its highs at the close, it still finished the day with a gain of 247.17 points or 1.2 percent, closing at 20,173.89.
The S&P 500 similarly increased by 22.99 points or 0.4 percent to 6,074.08, while the narrower Dow defied the trend, dropping 110.58 points or 0.3 percent to 43,717.48. This marked its lowest closing level in nearly a month, having fallen for eight consecutive sessions.
In international markets, Asia-Pacific stocks showed mixed results on Tuesday. Japan's Nikkei 225 Index decreased by 0.2 percent, China's Shanghai Composite Index fell by 0.7 percent, while Australia's S&P/ASX 200 Index rose by 0.8 percent.
European market activity showed mostly downward trends, with the U.K.'s FTSE 100 Index dropping by 0.8 percent, Germany's DAX Index down by 0.2 percent, and the French CAC 40 Index remained marginally below its previous level.
In commodities, crude oil futures are down by $0.82, pricing at $69.89 per barrel after a prior drop to $70.71. Gold futures are also declining, priced at $2,658.40 per ounce following a $5.80 decrease to $2,670 in the former session.
Currency trading sees the U.S. dollar valued at 153.93 yen, down from 154.15 yen at Monday's New York close. Meanwhile, it stands at $1.0494 against the euro, compared to $1.0512 from the previous day.
The material has been provided by InstaForex Company -
www.instaforex.com
