US markets had a weak open today with the Dow Jones 138 points, nearly a full percent, while S&P 500 futures slipped 0.5% so far. The Nasdaq 100 is the worst of the bunch, down 1.15% in the first hour of trading.

The Fed Clue

The key factor that will drive the U.S. markets today will be commentary from the Federal Reserve as it will conclude its two-day policy meeting. Investors will dissect every word as usual for any change in tone from the central bank in its monetary policy tightening stance. Mostly, it is expected that the Fed will step up rates gradually on the back of tepid growth in global markets and lackluster domestic economic growth in the fourth quarter.

Apart from the Fed’s policy statement, market participants will also look forward to new home sales data, which will be published later today. The U.S. Energy Information Administration will also issue its weekly report on oil supplies, which will be significant for the market as every oil update generates new swings.

Indication from Saudi Arabia and Russia over a possible output cut had supported the oil rally yesterday, but it appears to have fizzled out today.

Mixed global cues

Meanwhile, European stock markets are feeling pressure as oil prices retreat from the previous day’s gains. The Fed policy meeting is also weighing on European markets. On the other hand, most of the Asian indices except Shanghai finished the day on a positive note. The Shanghai Composite Index registered a 0.5% fall and breached its 13-month low. Analysts have noted that China is now giving priority to stabilizing the Yuan and strengthening its economy, steering away from its earlier efforts at inflating stock market sentiment.