The Money Edit

Opening bell

Opening bell

S&P futures 0.1%
10Y Treasury 5.04%
Brent crude $108.34 0.4%
Nikkei 225 0.7% to 63,923
S&P 500 close 0.5% to 7,585.73
Fed target range 3.50% to 3.75%

Fed set to hike for first time in three years

Overnight

US stocks fell for a second straight session on Tuesday, with the S&P 500 down 0.45% to 7,585.73, the Dow down 0.63% to 52,093.11 and the Nasdaq down 0.78% to 25,981.57, as the 10-year Treasury yield touched 5.04%, its highest level since 2007, and the 30-year reached 5.369%. Asia traded higher overnight, with Japan's Nikkei 225 up 0.7% to 63,923.00, South Korea's Kospi up 1.4% and the Shanghai Composite up 0.7%, and European markets opened slightly higher. US futures point to a firmer open, with S&P 500 futures up 0.13% and Nasdaq 100 futures up 0.32%, while Brent crude eased 0.4% to $108.34 a barrel after jumping more than 2% on Tuesday.

What to watch

The Federal Reserve announces its rate decision at 2pm Eastern, and futures markets put roughly a 93% chance on a quarter point increase that would lift its target range to 3.75% to 4%, the first rate rise in three years. Inflation is the reason, with consumer prices up 3.4% from a year earlier in August and the Fed's preferred gauge at 3.7% in July, both well above its 2% target. Watch the dot plot released alongside the decision, a chart showing where each policymaker expects rates to go, because traders are already pricing two increases by year end and any hint of fewer or more would move bonds fast. Chair Kevin Warsh speaks at 2:30pm Eastern, and August retail sales were due at 8:30am, giving a read on whether shoppers are still spending through higher prices.

Sources