US Futures drift lower as attention turns to rate decision

US stock market: Futures linked to the major US indexes edged down on Tuesday as investors adopted a cautious stance ahead of the Federal Reserve's interest rate decision at the conclusion of its two-day meeting, with a slew of earnings reports also in focus.

The Federal Reserve Open Market Committee is set to kick off its meeting later in the day, with market participants closely watching for any shifts in interest rate policy and Chair Jerome Powell's commentary.

Money markets are largely anticipating the central bank to maintain interest rates unchanged at this meeting, while pricing in approximately 35 basis points (bps) of rate cuts for the year, a decrease from the roughly 150 bps estimated earlier in the year, according to LSEG data.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, remarked, "Although the world's largest economy slowed more sharply than expected in the first three months of the year, key inflation readings show inflation remains stubborn and that's dashed hopes for early and multiple rate cuts."

US stocks closed higher on Monday, buoyed by significant gains in Tesla and Apple.

Tesla shares dipped 2.3 per cent in premarket trading on Tuesday, following a notable 15 per cent surge in the prior session fueled by reports of CEO Elon Musk dismissing two senior executives and planning substantial job cuts.

US equities faced a challenging April as persistent inflationary pressures tempered expectations of interest rate cuts, while escalating tensions in the Middle East and ongoing earnings reports contributed to market volatility.

All three major US stock indexes are on track to register their first monthly decline in six.

Additionally, investors are closely monitoring the quarterly earnings season, with companies like Eli Lilly, Coca-Cola, and 3M scheduled to announce results before the market opens.

At 05:32 a.m., Dow E-minis (1YMcv1) were down 28 points, or 0.07 per cent, S&P 500 E-minis were down 7 points, or 0.14 per cent, and Nasdaq 100 E-minis were down 22.75 points, or 0.13 per cent.

Coursera saw a premarket decline of 12.7 per cent after the online learning platform projected full-year revenue below market estimates.

(With Reuters inputs.)