Ongoing Interest Rate Concerns May Contribute To Pullback On Wall Street

After ending yesterday’s choppy trading session moderately higher, stocks may move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

Traders may look to cash in on the previous session’s gains amid ongoing concerns about the outlook for interest rates.

Last week, the Federal Reserve left interest rates unchanged as widely expected but forecast another rate hike before the end of the year as well as keeping rates at elevated levels for longer than previously anticipated.

CME Group’s Fed Watch Tool is currently indicating a 74.5 percent chance the Fed will leave interest rates unchanged at its next meeting in late October/early November and just a 25.5 percent chance of a quarter point rate hike.

Meanwhile, the Fed Watch Tool is indicating a 59.3 percent chance the Fed will leave rates unchanged at its December meeting and a 35.5 percent chance the central bank will raise rates by a quarter point.

Later in the week, the Commerce Department is due to release its report on personal income and spending in the month of August, which includes readings on inflation said to be preferred by the Fed.

Shortly after the start of trading, the Commerce Department is due to release its report on new home sales in the month of August. Economists expect new home sales to decrease to an annual rate of 700,000 in August after surging to a rate of 714,000 in July.

The Conference Board is also scheduled to release its report on consumer confidence in the month of September. The consumer confidence index is expected to edge down to 105.9 in September from 106.1 in August.

Following the sell-off seen last week, stocks showed a lack of direction over the course of the trading session on Monday. The major averages spent the day bouncing back and forth across the unchanged line before closing in positive territory.

The major averages moved to the upside going into the close of trading. The Nasdaq climbed 59.51 points or 0.5 percent to 13,271.32, the S&P 500 rose 17.38 points or 0.4 percent to 4,337.44 and the Dow inched up 43.04 points or 0.1 percent to 34,006.88.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while Hong Kong’s Hang Seng Index tumbled by 1.5 percent.

Most European stocks have also moved to the downside on the day. While the French CAC 40 Index and the German DAX Index are both down by 0.7 percent, the U.K.’s FTSE 100 has bucked the downtrend and edged up by 0.2 percent.

In commodities trading, crude oil futures are sliding $0.63 to $89.05 a barrel after falling $0.35 to $89.68 barrel on Monday. Meanwhile, after slipping $9 to $1,936.60 an ounce in the previous session, gold futures are edging down $7.70 to $1,928.90 an ounce.

On the currency front, the U.S. dollar is trading at 148.83 yen compared to the 148.88 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0605 compared to yesterday’s $1.0593.

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