Equity Futures Erase Monday Gains Ahead of FOMC Meeting

For a packed week Tuesday is pretty light, but that hasn’t stopped equity futures from dropping sharply lower. Markets in Europe are the likely culprit as Germany’s DAX is down -1.8% and shares in France and London are each 2.2% lower. 

Two hours before the opening bell, Dow futures are looking to open 97.00 points off at 9638, while S&P 500 futures are down 11.75 points at 1027.25.

Meanwhile, WTI Crude has fallen $1.09 to $77.04 per barrel, Spot Gold is trading $0.78 lower at $1058.72, and the US dollar is stronger against most currencies except the yen.

The only major data release today from the US is the factory orders index. In addition, markets will look at the weekly retail sales numbers from the ICSC (7:45) and the Johnson Redbook (9:55).

None of those are too influential, so attention could shift to speculation on medium-term monetary policy, as the FOMC begins its two-day policy meeting today. Chairman Ben Bernanke has already made the headlines this morning thanks to a Bloomberg report that says the Fed hopes to stop its purchases of mortgage-backed securities come March.

“The central bank says it must eventually withdraw its unprecedented economic stimulus to avoid a surge of inflation as a recovery takes hold,” the report said. “Plans to buy $1.25 trillion of housing debt are the centerpiece of its program to pull the nation out of the worst recession since the 1930s.”

Key Events Today: 

10:00 â€