U.S. Stocks May Lack Direction As Meeting Gets Underway

(RTTNews) - After ending the previous session mostly higher, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 0.1 percent.

Traders may be reluctant to make significant moves as the Federal Reserve's two-day monetary policy meeting gets underway.

While the Fed is widely expected to lower interest rates by 25 basis points, traders will look to the accompanying statement as well as officials' latest economic projections for clues about the outlook for rates.

CME Group's FedWatch Tool is currently indicating a 5.8 percent chance the Fed will cut rates by a quarter point and a slim 3.6 percent chance of a half-point rate cut.

The Fed is widely expected to lower rates by another 25 basis points at both its October and December meetings, although Fed Chair Jerome Powell is likely to say future rate cuts will depend on incoming economic data.

The futures remained little changed even after the Commerce Department released a report showing retail sales rose by much more than expected in the month of August.

The Commerce Department said retail sales climbed by 0.6 percent in August, matching an upwardly revised increase in July.

Economists had expected retail sales to inch up by 0.2 percent compared to the 0.5 percent growth originally reported for the previous month.

Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of August. Industrial production is expected to come in unchanged in August after edging down by 0.1 percent in July.

Stocks moved mostly higher during trading on Monday, adding to the strong gains posted last week. With the continued upward move, the Nasdaq and the S&P 500 reached new record closing highs.

The Nasdaq jumped 207.65 points or 0.9 percent to 22,348.75 and the S&P 500 climbed 30.99 points or 0.5 percent to 6,615.28. The narrower Dow posted a more modest gain, inching up 49.23 points or 0.1 percent to 45,883.45.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index and Australia's S&P/ASX 200 Index both rose by 0.3 percent, while China's Shanghai Composite Index inched up by less than a tenth of a percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index is down by 0.7 percent, the U.K.'s FTSE 100 Index is down by 0.3 percent and the French CAC 40 Index is down by 0.1 percent.

In commodities trading, crude oil futures are climbing $0.63 to $63.93 a barrel after rising $0.61 to $63.30 a barrel on Monday. Meanwhile, after surging $32.60 to $3,719 an ounce in the previous session, gold futures are inching up $8.70 to $3,727.70 an ounce.

On the currency front, the U.S. dollar is trading at 147.18 yen compared to the 147.40 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1796 compared to yesterday's $1.1796.