Stock Futures Retreat Amid Surging Wage Data and Fed Rate Decision Anticipation

Stock futures dipped into negative territory on Tuesday, influenced by unexpectedly high wage data that have reignited inflation concerns just before the Federal Reserve's interest rate decision scheduled for Wednesday. This development comes as McDonald’s shares experienced a decline after reporting disappointing earnings.

Market sentiments have shifted, with stocks on track for their first losing month since October, largely due to diminished expectations for rate cuts, which were initially high at the beginning of the year. The employment cost index, a key indicator of wage growth for civilian workers, rose by 1.2% in the March quarter, surpassing the 1% forecast by economists surveyed by Dow Jones. This led to a surge in Treasury yields following the announcement.

The week is packed with significant economic updates, including the Federal Reserve's two-day policy meeting starting Tuesday. While the central bank is expected to maintain steady interest rates, there is concern among traders that Fed Chair Jerome Powell might adopt a more hawkish tone in his post-meeting remarks, especially after recent reports indicating increased inflation pressures.

Meanwhile, the Nasdaq has shown signs of recovery from its recent slump, regaining some lost ground, which has been supported by strong corporate earnings across major US indices. This resurgence suggests that if positive earnings momentum persists, it could provide further stability to the markets.