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U.S. Stocks May Lack Direction As Fed Announcement Looms

After ending yesterday’s relatively lackluster session modestly higher, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by less than a tenth of a percent.

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

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement and Fed Chair Jerome Powell’s post-meeting press conference may shed additional light on the outlook for rates.

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Recent economic data has tamped down expectations of a near-term rate cut, with the central bank now seen as likely to leave rates unchanged until at least September.

Among individual stocks, shares of Eli Lilly (LLY) are moving sharply higher in pre-market trading after the drugmaker reported better than expected first quarter earnings and raised its full-year guidance.

Industrial conglomerate 3M (MMM) is also seeing significant pre-market strength after reporting first quarter results that beat expectations on both the top and bottom lines.

On the other hand, shares of McDonald’s (MCD) may move to the downside after the fast food giant reported first quarter earnings that missed analyst estimates.

Beverage giant Coca-Cola (KO) is also seeing modest pre-market weakness despite reporting better than expected first quarter results.

Following the strong upward move seen last week, stocks managed to see further upside during trading on Monday. The major averages fluctuated over the course of the session but ended the day in positive territory.

The Dow rose 146.43 points or 0.4 percent to38389.09, the Nasdaq climbed 55.18 points or 0.4 percent to 15983.08 and the S&P 500 advanced 16.21 points or 0.3 percent to 5,116.17.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.2 percent and Australia’s S&P/ASX 200 Index rose by 0.4 percent, but China’s Shanghai Composite Index bucked the uptrend and dipped by 0.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.6 percent, the French CAC 40 Index is down 0.2 percent and the German DAX Index is down by 0.4 percent.

In commodities trading, crude oil futures are rising $83.11 a barrel after plunging $1.22 to $82.63 a barrel on Monday. Meanwhile, after climbing $10.50 to $2,357.70 an ounce in the previous session, gold futures are tumbling $37.20 to $2,320.50 an ounce.

On the currency front, the U.S. dollar is trading at 157.17 yen compared to the 156.35 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0699 compared to yesterday’s $1.0721.

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