U.S. stocks were little changed on Tuesday morning as investors looked forward to a pivotal Federal Reserve meeting.
The Dow Jones Industrial Average and S&P 500 were flat, while the Nasdaq Composite dipped 0.2%.
Those moves come ahead of a widely anticipated Federal Reserve decision on Wednesday.
Wall Street is largely expecting interest rates the central bank to raise rates by 50 basis points this week, while some investors believe expectations of aggressive monetary tightening from the central bank are already priced into markets.
Billionaire hedge fund manager Paul Tudor Jones said on CNBC’s “” Tuesday that, with the Fed tightening and the economy slowing, capital preservation should be the main goal for investors.
“You can’t think of athan where we are right now for financial assets. Clearly you don’t want to own bonds and stocks,” Jones said.
The benchmark 10-year Treasury yield also climbed to a new milestone on Monday. The bond yield, its highest point since December 2018. However, it fell back on Tuesday, possibly easing selling pressure on stocks.
Stocks are coming off a brutal month. April was the worst month since March 2020 for the Dow and S&P 500. It was the worst month for the Nasdaq since 2008.
“We think the data continues to paint a picture of extreme fear and a contrarian opportunity for longer-term investors, even though there is scope for further movement/more downside in the very near term on some gauges,” RBC strategist Lori Calvasina said in a note to clients.
The expected rate hike comes as there are growing concerns about the global economy, due in part to China’s lockdowns and the war in Europe.
“Markets continue to be hostage to the China Covid-19 response and the geopolitics, which are overshadowing what is still a very resilient fundamental picture,” JPMorgan strategist Mislav Matejka said in a note to clients.
Corporate earnings reports were spurring individual stock moves on Tuesday.
Shares of Avis Budget jumped more than 6% after the car company surpassed earnings expectations on the top and bottom lines.
Chegg’s stock price tumbled nearly 30% after the textbook company issued weak guidance for the full year despite exceeding earnings expectations.
Elsewhere, shares Clorox and DuPont both rose in early trading after their reports.
, , and are expected to report earnings after the bell Tuesday.
Traders will also watch for the latest reading of the Job Openings and Labor Turnover (JOLTS) data that is expected at 10 a.m. ET on Tuesday. Data on auto sales for April is also expected on Tuesday.
On Monday, the major averages posted a wild up-and-down session with the Nasdaq Composite rising 1.63% in a late-day comeback, despite falling as much as 1.07% earlier in the day. The S&P 500 rose 0.57% after hitting a new 2022 low earlier in the session.
Meanwhile, the Dow gained 84 points, or 0.26%. At its session lows, the Dow was down more than 400 points.