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With the earnings season for S&P 500 companies having crossed
the halfway mark, all eyes are on the Fed's policy meeting on
Tuesday and Wednesday at the end of which investors are
expecting the central bank to deliver a fourth straight 75-basis
point interest rate hike to curb decades-high inflation.
The S&P 500 and the Nasdaq had notched two straight weekly gains
on Friday, supported by better-than-expected earnings from
companies outside the technology sector as well as hopes for a
less hawkish Fed in the future.
However, those hopes have taken a setback with recent data
showing robust consumer spending and sticky underlying inflation
though previous reports have pointed to some softening in
pockets of the U.S. economy.
Still, both indexes are set to record gains in October after two
straight months of declines.
Traders are nearly equally split in their expectations of the
Fed delivering a smaller interest rate hike at its next policy
meeting, with odds of a 50 basis point rate hike in December
standing at 47.9%, according to CME Group's Fedwatch tool.
At 6:06 a.m. ET, Dow e-minis were down 146 points, or 0.44%, S&P
500 e-minis were down 20.5 points, or 0.52%, and Nasdaq 100
e-minis were down 80.25 points, or 0.69%.
With 10-year bond yields rising for the second straight session,
shares of megacap tech giants such as Microsoft, Google owner
Alphabet and Meta Platforms that disappointed investors with
their earnings reports last week, fell between 0.7% and 1%
premarket.
Shares of U.S.-listed Brazilian firms such as oil major
Petrobras and iron ore miner Vale fell 9.7% and 2.9%
respectively after leftist Luiz Inacio Lula da Silva won
Sunday's presidential election.
(Reporting by Amruta Khandekar in Bengaluru; Editing by Maju
Samuel)
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