Wall Street stumbled in premarket trading on Tuesday, anticipating a busy week of inflation reports and the Federal Reserve’s latest interest rate policy decision. Futures for the S&P 500 dropped 0.3%, and futures for the Dow Jones Industrial Average slid 0.4%.
Eli Lilly shares rose 2.2% before the bell after receiving the backing of federal health officials for its Alzheimer’s drug, donanemab. FDA advisers unanimously voted that the drug’s benefits outweigh its risks, paving the way for full approval later this year.
General Motors saw a slight increase after announcing its board approved a $6 billion stock buyback. Its shares rose another 1%, contributing to a more than 32% increase this year.
Treasury yields decreased slightly in the bond market ahead of reports that will reveal whether inflation improved last month at both consumer and wholesale levels. On Wednesday, the Federal Reserve will announce its latest decision on interest rates. Although no change is expected, policymakers will release their latest forecasts for interest rates and the economy.
In March, Fed officials projected roughly three interest rate cuts in 2024. This projection will likely decrease, with Wall Street traders betting on just one or two cuts, according to CME Group data. Recent economic data has been mixed, and traders are hoping for a slowdown that avoids a recession and eases inflation, which could prompt the Fed to cut rates from their highest levels in over two decades.
In Europe, Britain’s FTSE 100 lost 1% after government data showed a cooling jobs market, with the unemployment rate rising to 4.4%, the highest since September 2021. The CAC 40 in Paris fell 1.2%, and Germany’s DAX was down 0.8%.
In Asia, Tokyo’s Nikkei 225 gained 0.3% to 39,134.79 as investors awaited the Bank of Japan meeting outcome. The central bank raised its benchmark interest rate in March for the first time in 17 years. Analysts expect two rate hikes by the end of the year, with more increases anticipated as soon as July. Hong Kong’s Hang Seng dropped 1% to 18,176.34, and the Shanghai Composite lost 0.8% to 3,028.05. Australia’s S&P/ASX 200 slipped 1.3% to 7,755.40, while South Korea’s Kospi gained 0.2% to 2,705.32.
In other markets, U.S. benchmark crude oil fell 12 cents to $77.62 per barrel, continuing its 12.8% decline since early April. Brent crude, the international standard, fell 11 cents to $81.52 per barrel. The U.S. dollar inched up to 157.07 Japanese yen from 157.04 yen, while the euro fell to $1.0734 from $1.0766.
On Monday, the S&P 500 rose 0.3% to 5,360.79, topping its all-time high set last week. The Nasdaq composite also set a record, rising 0.3% to 17,192.53, while the Dow Jones Industrial Average gained 0.2% to 38,868.04.
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