US stock futures unchanged after Dow tops 36,000 as investors brace for likely Fed cut

US stock index futures paused on Tuesday after stocks rose to an all-time high the previous day as investors braced for a meeting of the Federal Reserve, which is likely to make a key policy decision.

S&P 500 and Dow Jones futures were little changed on Tuesday, while Nasdaq 100 futures were down 0.12%.

US stock indices continued to rise on Monday, with all three major indices closing at record highs and the Dow Jones index briefly surpassing the 36,000-point mark. A strong third-quarter earnings season supported equities, helping investors shrug off concerns about inflation and central bank policy.

On Tuesday, oil major BP reported strong year-on-year earnings growth amid high global energy prices and said it would buy back $1.25 billion worth of shares.

The reporting season continues this week with Berkshire Hathaway and Pfizer among the largest companies releasing results.

Beyond earnings, investors will focus on the Federal Reserve and the Bank of England, which will announce monetary policy this week, with both central banks struggling with rising inflation.

The Fed may well announce that it will start "cutting" bond purchases by $120bn a month on Wednesday, while the Bank of England is expected to raise interest rates on Thursday.

"We expect the Fed to announce that it will start cutting asset purchases in November with a monthly reduction of $15 billion a month," Barclays analysts, including chief US economist Michael Gapen, said.

"This will allow the cuts to be completed by mid-2022, providing an opportunity to raise rates if necessary."

In bond markets, short-term yields rose sharply as investors bet that central banks would soon start cutting their support for the economy. However, they fell on Tuesday, with the yield on 3-year US Treasuries falling by 4.3 basis points to 0.74%.

Analysts at RBC Capital Markets, led by US equity strategy director Laurie Calvasina, said the reporting season showed that companies were still nervous about major issues in the economy, especially inflation and deficits.

"In terms of supply chains, the vast majority of companies continue to describe difficult conditions that are ongoing or worsening," the note said. "Within the supply chain discussion, labour has become a clear hot button, followed by inflation / pricing and COVID and ports / logistics."

In Asia, according to เกี่ยวกับโบรกเกอร์ Exness, the CSI 300 index fell 1.04% overnight after Beijing authorities tightened restrictions in response to a single coronavirus outbreak. Japan's Nikkei 225 fell 0.43% after a solid rise the day before.

The European Stoxx 600 stock index was down 0.13 per cent in early trading on Tuesday.

Elsewhere, oil prices remained high ahead of an important meeting of the OPEC group of oil-producing countries on Thursday, where participants are set to decide whether to move faster with a supply increase.

Brent crude rose 0.2 per cent to $84.88 a barrel, just below the three-year high reached in October. WTI crude oil fell 0.13% to $83.94 a barrel, but remained near seven-year highs.

In cryptocurrency, bitcoin was 3.4 per cent higher at $62,817, down from a record high of $66,000 reached in October.

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