Wall Street set to falter at the open as Fed meets

By Yashaswini Swamynathan

REUTERS - U.S. stocks looked set to open marginally lower on Tuesday as investors fixed their sights on the outcome of a meeting where the Federal Reserve is widely expected to raise interest rates for the first time this year.

The Fed meets over two days starting Tuesday, with traders pricing in a 90 percent chance of a quarter point rate hike as inflation picks up and the labor market shows solid strength.

Early on Tuesday, Dow e-minis were down 62 points, or 0.3 percent, with 12,309 contracts changing hands.

S&P 500 e-minis were down 8 points, or 0.34 percent, with 132,876 contracts traded.

Nasdaq 100 e-minis were down 13.25 points, or 0.25 percent, on volume of 6,560 contracts.

The Fed's statement is due at 2:00 p.m. ET on Wednesday, which will be followed by Fed Chair Janet Yellen's press conference.

"Ahead of a major data point like the Fed, you typically don't see big investors move sharply in one way or the other," said Adam Sarhan, chief executive officer at 50 Park Investments in Florida.

"Investors are taking a wait-and-see approach, don't expect any fireworks today."

Wall Street's top banks were unanimous on the view the Fed would raise rates at its policy meeting, a Reuters poll showed on Friday.

The next big question for the market is whether the Fed signals a more aggressive tightening path than previously expected, especially as markets are betting on a potential economic boost from President Donald Trump's proposed fiscal policies.

Wall Street's major indexes have been largely kept in check since the start of the month as investors prepared for higher rates following a slew of hawkish comments from top Fed officials.

On Monday, stocks ended flat with the S&P 500 trading in its tightest range this year.

Shares of Valeant plunged 13 percent to $10.56 in heavy premarket trading on Tuesday after billionaire investor William Ackman said his hedge fund, Pershing Square Capital Management, sold its entire stake in the company.

Dow component Wal-Mart was up 1.1 percent at $70.69.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva & Shri Navaratnam)