U.S. stock futures fell on Tuesday, signaling a pullback from record highs as investors waited for the Federal Reserve to begin a meeting that is expected to indicate the direction of interest rates.
S&P 500 futures () and tech-heavy Nasdaq 100 futures () both fell about 0.3% after hitting all-time highs at the closing bell. Dow Jones Industrial Average futures () were down 0.4%.
The stock market has managed to rally amid worries that the economy is overheating or overcooling, and a string of inconclusive data has raised doubts about the possibility of three interest rate cuts in 2024 that the Fed envisaged in March. Many investors now expect just one rate cut by the end of the year.
The two-day Fed policy meeting that starts on Tuesday is expected to finish with borrowing costs at their highest in two decades, and investors will continue to watch for hints as to when a shift to rate cuts might occur, with September or November in sight.
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Investors gauging the likelihood of a rate cut are also keeping a close eye on the release of May’s consumer price index on Wednesday, as it will play a key role in the Fed’s deliberations.
Meanwhile, shares of iPhone maker Apple (AAPL) remained lower as the company continued to fall following losses associated with its AI debut, while shares of pharmaceutical company Eli Lilly (LLY) soared after the company’s early-stage Alzheimer’s disease treatment received unanimous backing from FDA advisers.
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