By Dhirendra Tripathi
Investing.com -- Investors shook off Monday’s volatility and pushed stocks slightly higher for much of the day on Tuesday, seeming to relax about the debt worries at China’s Evergrande that shook the markets earlier. Stocks held onto gains until the very end, when the S&P 500 and Dow dipped into the red, though Nasdaq finished up.
Of course, the Federal Reserve kicks off its policy meeting today and concludes it later on Wednesday, when it will release its decision and Chair Jerome Powell will say a few words to the media. Anticipation has been building for weeks.
Tech stocks pushed the Nasdaq higher and the CBOE Volatility Index index, also called the “fear gauge” on Wall Street, dipped below the four-month high it hit a day earlier.
Evergrande concerns boiled over in yesterday’s session as investors worried that it could become a global contagion in financial markets. The world’s largest economies are trying to recover from the pandemic, and any disruption could unsettle markets.
The Fed is expected to lay the groundwork to ease its massive bond-buying stimulus, though it could put off announcing its plans until future meetings. Though this tapering is widely expected to start in the coming months, the markets are still skittish about the details.
Here are three things that could affect markets tomorrow:
1. Food earnings
General Mills Inc (NYSE:GIS), the maker of Cheerios cereal and Yoplait yogurt, will report its first-quarter performance on Wednesday. It is expected to clock 89 cents in profit per share on revenue of $4.3 billion.
2. Focus on home builders
Home builders have had an ugly week after D.R. Horton Inc (SA:D1HI34) lowered sales expectations and Lennar Corporation (NYSE:LEN)missed on revenue, both citing supply chain issues. After tomorrow’s closing bell, KB Home (NYSE:KBH)is set to report earnings. It is seen posting $1.61 in profit per share on third-quarter revenue of $1.56 billion.
3. The big meeting
The two-day meet of the Federal Open Market Committee concludes Wednesday. The Fed has indicated pulling back on its unprecedented monetary support before the end of the year. The exercise is likely to begin with the central bank first slowing its asset purchases to eventually follow it up with an interest rate hike. Major policy changes are not expected at Wednesday’s announcement by Chairman Jerome Powell, but nonetheless, all eyes are on him.