U.S. stocks on Tuesday opened to the downside following some mixed numbers on the housing market. Focus remains squarely on the Federal Reserve’s rate decision, as the monetary policy committee’s two-day meeting begins.
Minutes after the opening bell, the S&P 500 (SP500) was -0.3%, the Dow (DJI) was -0.2% and the Nasdaq Composite (COMP.IND) was -0.4%.
“It’s (another) waiting day ahead of tomorrow’s FOMC meeting. Equities are steady, but Treasury yields are edging higher after yesterday’s small fall and Brent remains around $95p/b,” SocGen’s Kit Juckes writes. “The market doesn’t expect a Fed hike but the dot-plot, which currently suggests there will be one more this year before a steady fall, thereafter, could see cuts pushed further out, while the tone of the statement is certain to be hawkish, as the FOMC reinforces the ‘higher for longer’ message.”
“The U.S. rates market prices in virtually no chance of a rate hike tomorrow, and just shy of a 50% chance of a 25bp hike before Christmas.”
The 10-year Treasury yield (US10Y) rose 4 basis points to 4.34% and the 2-year yield (US2Y) rose 2 basis points to 5.08%.
August housing starts plunged to an annual rate of 1.283M. That’s the lowest level since June 2020. Economists had expected them to hold fairly steady at 1.44M.
But building permits unexpectedly rose to 1.543M.
See the stocks making the biggest moves this morning.