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The main indexes shed more than 2% on Tuesday as investors
interpreted a rebound in U.S. business activity in February to
mean interest rates will need to stay higher for longer to
control inflation.
Minutes from the Fed's Jan.31-Feb.1 meeting, expected at 2:00
p.m. ET (1900 GMT), is anticipated to detail the breadth of
debate at the central bank over how much further interest rates
may need to be raised to slow inflation.
Following a market rout in 2022, the three major indexes logged
monthly gains in January as investors hoped the Fed would pause
its rate hikes and perhaps turn a corner in its monetary policy
tightening around the year-end.
However, stocks have had a volatile run in February as traders
priced in higher interest rates for longer, considering
inflation still remains above the 2% target in the face of a
sturdy economy.
Money market participants expect rates to peak at 5.35% by July
and stay around those levels till the end of 2023.
At 07:13 a.m. ET, Dow e-minis were up 26 points, or 0.08%, S&P
500 e-minis were up 2.5 points, or 0.06%, and Nasdaq 100 e-minis
were up 12 points, or 0.1%.
Among single stocks, Palo Alto Networks Inc rose 9.3% in
premarket trading after the cybersecurity company raised its
annual profit forecast. Rival Crowdstrike Holdings Inc gained
2%.
U.S.-listed shares of Baidu Inc advanced 6.6% after China's
e-commerce beat fourth-quarter revenue estimates and announced a
new share repurchase program.
CoStar Group dropped 15.2% as the online real estate marketplace
provider said it was no longer in talks to buy Realtor.com owner
Move Inc from News Corp and forecast disappointing first-quarter
revenue.
St. Louis Fed President James Bullard said rates will have to go
north of 5% to tame inflation. New York Fed President John
Williams, a voting member of the rate-setting committee this
year, is scheduled to speak later in the day.
(Reporting by Johann M Cherian and Medha Singh in Bengaluru;
Editing by Arun Koyyur)
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