Fed’s two-day meeting starts today
ReutersU.S. President Donald Trump and North Korea's leader Kim Jong Un sign documents that acknowledge the progress of the talks.
U.S. stock futures ebbed lower Tuesday as investors assessed the early fruits of labor from U.S. President Trump’s unprecedented summit with North Korean leader Kim Jong Un in Singapore.
What are markets doing?
Futures for the Dow Jones Industrial Average (YMM18.CBT) fell 25 points, or 0.1%, to 25,325.00, while futures for the S&P 500 Index (ESM18.CME) lost 2.3 points to reach 2,784.50. Nasdaq-100 futures (NQM18.CME) shed 9.25 points, or 0.1%, to 7,186.75.
The moves signal a lower open after modest gains for U.S. stocks on Monday in the runup to the U.S.-North Korea summit and the Federal Reserve meeting today. The Dow Jones Industrial Average (^DJI) ended barely in the green at 25,322.31, as the Dow Jones Transportation Average (:DJT) put on 1.1%, less than 3% shy of its all-time closing peak of 11.373.38. The S&P 500 (^GSPC) closed up 0.1%, and the Nasdaq Composite Index (^IXIC) added 0.2%.
The small-capitalization Russell 2000 index (^RUT) rose 0.1% at 1,674.68, just short of its closing all-time peak at 1,675.95.
What’s driving the market?
U.S. stocks futures dropped as the historic summit in Singapore — the first between a U.S. sitting president and a North Korean leader — came to an end.
Trump and Kim signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process.
Beyond geopolitics, traders were focusing on central-bank meetings this week. The Fed, led by Chairman Jerome Powell, is expected to raise interest rates on Wednesday. The U.S. central bank’s two-day meeting begins Tuesday. European Central Bank policy makers are expected to announce the timing for unwinding its bond buying when they meet on Thursday.
Check out: How stock investors can profit from this week’s Fed meeting
What strategists are saying
“It looks a lot like ‘buy the rumor, sell the fact’ where the Trump-Kim summit is concerned. Having shrugged off the failed G-7 meeting, markets are finding it hard to make progress this morning despite the bullishness that was very much in evidence yesterday,” said Chris Beauchamp, chief market analyst at IG, wrote in a note.
“Perhaps the upcoming Fed and ECB meetings are keeping sentiment in check for the time being. The overall picture remains firmly bullish, and is probably an opportunity to add to risk in the near-term, markets having weathered the storm of trade wars successfully thus far,” he added.
Which economic data are in focus?
The index of small-business optimism from the National Federation of Independent Businesses soared to 107.8 in May. The three-point gain took the index to its second-highest level in its 45-year history, the NFIB said.
The consumer price index for May and a reading on core CPI are expected at 8:30 a.m. Eastern Time. At 2 p.m. Eastern, the Federal budget is scheduled for release.
Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.
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