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The
fast-spreading Omicron coronavirus variant also tamped down the
mood after the S&P 500 index hit an all-time closing high late
last week.
Megacap technology and communications stocks including Meta
Platforms, Microsoft Corp, Tesla Inc, Alphabet Inc and
Amazon.com Inc fell between 0.6% and 2% in premarket trading.
Apple Inc rose 0.4%, bucking a trend among its heavyweight
peers, as it stayed on track to become the world's first $3
trillion company in market value.
Market participants are expecting a hawkish tone from the Fed at
the end of its two-day meeting on Wednesday. The U.S. central
bank will likely signal a faster wind-down of asset purchases,
and thus, a quicker start to interest rate hikes in order to
contain the rapid rise in prices.
A Reuters poll of economists sees the central bank hiking
interest rates from near zero to 0.25%-0.50% in the third
quarter of next year, followed by another in the fourth quarter.
"The central bank is set to announce an acceleration of tapering
from January 2022, with consensus expecting the pace to double
in speed, in order to counter inflation," Lukman Otunuga, senior
research analyst at FXTM, wrote in a client note.
"Traders are currently pricing in a 73% probability of at least
one rate hike by early May 2022 and fully pricing a 25-basis
point hike by mid-June 2022."
Data from the U.S. Labor Department will likely show the
producer price index (PPI) for final demand rose 9.2%
year-on-year in November, after climbing 8.6% in the month
before.
At 6:54 a.m. ET, Dow e-minis were up 13 points, or 0.04%, S&P
500 e-minis were down 11 points, or 0.24%, and Nasdaq 100
e-minis were down 105.75 points, or 0.66%.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Saumyadeb Chakrabarty)
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