Investing.com — U.S. stock futures slipped lower Tuesday, amid caution at the start of the latest Federal Reserve meeting and ahead of the release of key inflation data later in the week.
By 06:05 ET (10:05 GMT), the Dow Futures contract was down 145 points, or 0.4%, S&P 500 Futures traded 15 points, or 0.3%, lower and Nasdaq 100 Futures dropped 60 points, or 0.3%.
The main U.S. averages closed marginally higher Monday, with the broad-based S&P500 and the tech-heavy NASDAQ Composite notching new record highs, while the blue chip Dow Jones Industrial Average gained 0.2%.
Fed starts June meeting
The Federal Reserve starts its latest two-day policy-setting meeting later in the session, and this is prompting a degree of caution in the stock markets Tuesday.
The U.S. central bank is widely expected to leave interest rates on hold at a more than two-decade high of 5.25% to 5.5% on Wednesday, with several officials having recently suggested that they need further evidence the pace of inflation is cooling back down to their 2% target level before beginning to lower rates.
Of more interest is likely to be the subsequent press conference from Fed Chair Jerome Powell as well as the revelation of the bank’s latest “dot plot” on Wednesday, which outlines how officials expect borrowing costs to evolve in the future.
The FOMC predicted three interest rate cuts this year when its forecasts were last released, but policymakers are likely to have lowered the number of cuts they see this year.
US CPI release due
The economic data slate is quiet Tuesday, but Wednesday also sees the release of the May reading of its U.S. consumer price index, a highly-anticipated gauge of inflation in the world’s largest economy.
Further signs of inflation easing could cement expectations for rate cuts, especially given signs of economic weakness, but a bad inflation miss could spook investors and bring back recession fears that have laid dormant for months.
Apple announces OpenAI partnership
In the corporate sector, earnings are due from the likes of Oracle (NYSE:ORCL) and Rubrik (NYSE:RBRK) after the bell, but Apple (NASDAQ:AAPL) is likely to be in the spotlight after the iPhone maker announced a partnership with OpenAI that will see it fold the start-up’s ChatGPT chatbot into its products.
The agreement, which was revealed at Apple’s annual developers conference on Monday, comes as the tech giant looks to enhance its artificial intelligence capabilities following an intensifying surge in enthusiasm around the nascent technology.
Crude just lower ahead of API data
Oil prices edged down slightly on Tuesday, as traders geared up for the Fed decision and fresh U.S. inflation figures.
At 06:05 ET, Brent oil futures had fallen 0.2% to $81.46 per barrel, while West Texas Intermediate crude futures dipped 0.3% to $77.53 per barrel.
Prices had touched a one-week high on Monday on hopes of rising demand over the key summer travel period in the U.S., although analysts noted that the positioning was likely overly optimistic.
The American Petroleum Institute is set to release its estimate of weekly U.S. crude stockpiles later in the session.
