Stock futures dip with Fed set to kick off September meeting on Tuesday

Stock futures slipped Tuesday as Wall Street looked to build on a modest rebound ahead of another rate hike from the Federal Reserve.

Futures tied to the Dow Jones Industrial Average fell 58 points, or 0.2%. S&P 500 futures shed 0.3%, and those for the Nasdaq 100 traded 0.5% lower.

The Federal Open Markets Committee kicks off its September meeting on Tuesday, and the central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.

“I think last week a lot of the work was done to reset interest rate expectations,” said Angelo Kourkafas, investment strategist at Edward Jones.

“The momentum in equity markets is to the downside. … Until we establish that pattern of lower [inflation] readings, it’s going to be hard to reverse that elevated uncertainty and volatility that we are seeing,” Kourkafas added.

During a choppy trading session on Monday, stocks rose in the afternoon to snap a two-day losing streak and claw back some of their recent losses. The Dow rose 197 points, or about 0.6%. The S&P 500 and Nasdaq Composite gained roughly 0.7% and 0.8%, respectively.

However, after the market closed on Monday, Ford announced that supply chain issues would cost the automaker an extra $1 billion in the third quarter. Shares fell nearly 5% in premarket trading.

On the economic front, investors will get a fresh look at the housing market on Tuesday morning with the August reports for housing starts and building permits.