US stock futures slip lower ahead of Fed meeting; major earnings due

Investing.com– U.S. stock index futures slipped lower Tuesday as a rally in the technology sector appeared to be running out of steam ahead of the latest Federal Reserve meeting.

At 05:35 ET (09:35 GMT), Dow Jones Futures fell 37 points, or 0.1%, S&P 500 Futures dropped 8 points, or 0.2%, while Nasdaq 100 Futures slipped 27 points, or 0.2%. 

The main Wall Street indices closed with small gains on Monday, mostly closing higher over the past three sessions. However, they are still set to record losses of between 2.4% and 3.6% in April, hit by some profit-taking after a strong run-up through the first quarter, especially as traders priced out expectations for early rate cuts this year. 

Rate cut hopes dwindle as Fed meeting approaches 

The Federal Reserve starts its latest two-day policy-setting meeting later in the session, and this could curtail activity.

The U.S. central bank is widely expected to keep rates steady, but Fed Chair Jerome Powell is likely to offer hawkish signals on the path of interest rates, especially after a series of hotter-than-expected inflation readings. 

Investors have largely priced out the likelihood of rate cuts this summer, with September now seen as the favorite month for the Fed to start a rate-cutting cycle, according to the CME Fedwatch tool. 

Higher for longer rates bode poorly for stock markets, given that they weigh on economic activity as well as limiting speculation by putting a cap on liquidity. 

Amazon, Coca-Cola earnings on tap

The first-quarter earnings season is set to continue on Tuesday with a string of key results on tap.

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The list of major companies due to report include Amazon (NASDAQ:AMZN), Coca-Cola (NYSE:KO), Starbucks (NASDAQ:SBUX), Mondelez (NASDAQ:MDLZ), Eli Lilly (NYSE:LLY) and Advanced Micro Devices (NASDAQ:AMD), as well as 3M Company (NYSE:MMM) and PayPal (NASDAQ:PYPL).

Aside from this, Paramount Global (NASDAQ:PARA) has announced that Chief Executive Bob Bakish has stepped down amid ongoing talks over a potential tie-up talks with David Ellison’s Skydance Media.

HSBC (NYSE:HSBC) said on Tuesday that Chief Executive Noel Quinn will retire after nearly five years in the role, where he oversaw a major transformation in the bank that drastically improved its cash position and earnings.

Crude steadies with focus on Israel-Hamas peace talks

Oil prices steadied Tuesday, after the prior session’s losses as focus remained on any progress in ceasefire talks between Israel and Hamas.

By 05:35 ET, the U.S. crude futures traded 0.4% higher at $82.94 a barrel, while the Brent contract rose 0.4% to $87.57 a barrel.

Both benchmarks lost around 1% on Monday after peace talks in Cairo between Israel and members of the militant group Hamas resulted in traders unwinding some of the geopolitical risk premium in oil prices.

Fears of disruptions in Middle East supply have been a key booster of oil prices in recent weeks. But this notion somewhat eased after a conflict between Iran and Israel did not give way to war. 

(Ambar Warrick contributed to this article.)