Looming Fed Decision May Lead to Choppy Trading on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a roughly flat opening on Tuesday following the sell-off seen in the previous session.

Traders may be reluctant to make any significant moves ahead of the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.

Stocks moved sharply lower during trading on Monday, with the major averages adding to the losses posted last week.

The major averages climbed off their worst levels of the day going into the close but remained firmly negative. The Dow tumbled 335.60 points or 1.4 percent at 24,610.91, the Nasdaq plunged 137.74 points or 1.8 percent to 7,344.24 and the S&P 500 plummeted 39.09 points or 2,712.92.

The sell-off on Wall Street reflected lingering concerns about a potential trade war as well as political uncertainty following recent developments in Washington.

Traders are also looking ahead to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.

With the Fed widely expected to raise interest rates by 25 basis points, traders are likely to keep an eye on the accompanying statement for clues about the outlook for future rate hikes.

New Fed Chairman Jerome Powell’s first press conference as head of the central bank is also likely to attract considerable attention.

Reports on new and existing home sales, durable goods orders, and leading economic indicators may also impact trading in the coming days.

A steep drop by social media giant Facebook (FB) is weighing on the markets amid allegations political consulting firm Cambridge Analytica inappropriately obtained and used user data.

Telecom stocks showed a significant move to the downside on the day, dragging the NYSE Arca Telecom Index down by 2.6 percent.

Smartphone chip supplier Qualcomm (QCOM) posted a notable loss following news former chairman Paul Jacobs won’t be re-nominated to the company’s board.

Energy, computer hardware and steel stocks also showed considerable moves to the downside, reflecting broad-based weakness on Wall Street.