Fed meeting looms, debt ceiling deadline, Eurozone CPI - what's moving markets

Investing.com -- U.S. futures point slightly lower with Federal Reserve's latest policy-setting meeting set to get underway, while Pfizer leads the day's earnings charge and debt ceiling negotiations in Washington face a tighter-than-anticipated deadline. Meanwhile, inflation in the euro inches up ahead of the European Central Bank's own gathering later this week.

1. Futures inch down but hold near flatline as Fed meeting approaches

U.S. stock futures were in the red on Tuesday, but largely hovered around the flatline, as attention shifted to what could be a pivotal Federal Reserve meeting (see below) and a string of closely-watched job market data.

At 05:25 ET (09:25 GMT), the Dow futures contract traded down by 74 basis points or 0.22%, S&P 500 futures inched down 8 points or 0.15%, and Nasdaq 100 futures dipped 4 points or 0.03%.

On the economic data front, the Job Openings and Labor Turnover Survey (aka JOLTS) is due out on Tuesday. The report, which tracks job vacancies and the number of workers who have decided to quit, helps gauge the level of demand in the labor market.

The data will serve as a warm-up act before the all-important April jobs report on Friday, which is expected to point to the third-straight monthly deceleration in employment growth.

2. Fed meeting gets underway

The Federal Reserve's two-day policy-setting meeting is set to begin later today.

The U.S. central bank has been aggressively tightening monetary policy over the past year in a bid to cool red-hot inflation, but concerns remain over how much these decisions will impact growth. First-quarter gross domestic product figures last week pointed to sluggish overall activity in the world's biggest economy.

But recent turmoil in the banking sector - marked this week by the failure of First Republic Bank and JPMorgan's (NYSE:JPM) subsequent takeover of the bulk of its assets - has led many observers to predict that the Fed will pause after this latest hike.

In March, policymakers raised rates to their highest level since 2007. Following that meeting, the Fed's "dot plot" forecast signaled that one more quarter-point hike was likely in 2023.

3. Pfizer highlights earnings wave

Pfizer (NYSE:PFE) is among the largest U.S. companies to release their latest results on Tuesday, with investors keen to see how demand for the pharmaceutical giant's COVID-19 products is faring.

Any possible updates around the group's $43 billion purchase of biotechnology company Seagen in March, which is still being mulled over by regulators, are also expected to be a major focus.

Other companies set to release earnings today include chipmaker Advanced Micro Devices (NASDAQ:AMD), coffee chain Starbucks (NASDAQ:SBUX), and ridesharing firm Uber (NYSE:UBER).

This week will also see numbers from Apple (NASDAQ:AAPL), the largest American company by market value. The report from the iPhone maker, which is scheduled to be unveiled on Thursday, is typically considered to be an indicator of the strength of global consumer demand.

4. Debt ceiling pressure rising

U.S. Treasury Secretary Janet Yellen turned the heat up on lawmakers in Washington, warning that the government will not be able to meet its obligations as soon as June 1 if a deal is not reached to raise or suspend the debt ceiling.

The statement, issued in a letter to Republican House Speaker Kevin McCarthy on Monday, set out a deadline that was earlier than many on Wall Street had expected. Economists at Goldman Sachs had tentatively placed the so-called "X-date" - that is, the day when the Treasury can no longer meet its obligations to debtholders - at some time in late July.

Yellen's comments were backed up by the Congressional Budget Office, which also estimated that the Treasury would run out of funds by early June, citing weaker-than-expected tax receipts.

The Biden administration has long said it will not meet with McCarthy over the debt limit as long as House Republicans demand that any deal comes with big cuts to some of the president's major spending initiatives. But as June edges closer, the White House will likely face more pressure to join talks.

5. Eurozone inflation edges higher, but core prices cool

Headline inflation in the Eurozone ticked slightly higher as expected in April, in a sign that price growth remains stubbornly elevated as regional rate-setters gear up to unveil their latest rate decision this week.

The currency's area consumer price index for the month rose to 7.0% on an annualized basis, according to preliminary data from Eurostat, in line with economists' forecasts. Meanwhile, core inflation, which strips out volatile items like food and fuel, slowed marginally to 5.6%, surprising estimates that the figure would remain unchanged.

The April numbers come as the European Central Bank prepares to hold its latest monetary policy meeting on Thursday, with officials widely tipped to raise borrowing costs. However, forecasts differ over whether the ECB will hike rates by 25 basis points or opt for a larger 50 basis point increase.