(Reuters) – U.S. stock index futures climbed on Tuesday, following a rocky start to the week, as investors focus on a two-day meeting where the Federal Reserve is expected to raise interest rates for the fourth time this year and signal the path of future rate hikes.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 11, 2018. REUTERS/Brendan McDermid
Wall Street’s three major indexes slid more than 2 percent on Monday, with the S&P 500 .SPX closing at a 14-month low, as bearish comments from Jeffrey Gundlach, chief executive officer of DoubleLine Capital, added to worries of a global economic slowdown.
While investors have already baked in a fourth rate hike for the year on Wednesday, turbulent stock markets and a host of other worries have fueled calls for the Fed to pause its tightening cycle or risk harming the U.S. economy.
On Monday, President Donald Trump as well as Gundlach, known on Wall Street as the bond king, both said the Fed should not raise rates this week.
Shares of banks, which are sensitive to interest rates, gained in premarket trading. Citigroup Inc (C.N), Goldman Sachs Group Inc (GS.N) and Bank of America Corp (BAC.N) rose between 0.60 percent and 0.74 percent.
Also helping sentiment early in the day was Oracle Corp (ORCL.N). The business software maker rose 5.6 percent after forecasting strong current-quarter profit on growth in its cloud business.
Boeing Co (BA.N) gained 2.5 percent after raising dividend and increasing its share repurchase program.
At 7:03 a.m. ET, Dow e-minis 1YMc1 were up 90 points, or 0.38 percent. S&P 500 e-minis ESc1 were up 11 points, or 0.43 percent and Nasdaq 100 e-minis NQc1 were up 38.75 points, or 0.6 percent.
But it remains to be seen if the gains hold. In what has been a turbulent month for U.S. stocks, the market has more often than not failed to build on an uptick in early trading.
The S&P has ended lower in seven of the 10 sessions so far this month, notching up losses of more than 1.5 percent in four of them, including the last two sessions.
In yet another sign of deteriorating confidence, Bank of America Merrill Lynch’s December investor survey showed more fund managers expecting global growth to weaken over the next 12 months, the worst outlook in a decade.
The survey showed the U.S. dollar had replaced the FAANGs – Facebook Inc (FB.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Google-parent Alphabet Inc (GOOGL.O) – as the most crowded trade for the first time since January.
At 8:30 a.m. ET, data from the Commerce Department is expected to show housing starts might have fallen to 1.225 million units in November from 1.228 million in October.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta