Stock futures are flat as investors brace for a big Fed rate hike

cnbc.com:

Stock futures were little changed in overnight trading Tuesday as investors anxiously awaited the Federal Reserve's aggressive action to tame surging inflation.

Futures on the Dow Jones Industrial Average rose just 24 points. S&P 500 futures edged up 0.1% and Nasdaq 100 futures gained less than 0.2%.

The S&P 500 suffered a five-day losing streak on Tuesday, dipping deeper into bear market territory. The equity benchmark has fallen more than 4% this week already and is now off over 22% from its all-time time hit in early January. The blue-chip Dow slid about 150 points Tuesday, also falling for a fifth straight day Tuesday. The Nasdaq Composite ended Tuesday slightly higher.

The rate-setting Federal Open Market Committee will conclude its two-day meeting on Wednesday. The market is betting on a 94% chance of a 75-basis-point rate hike, the biggest increase since 1994, according to the CME Group's FedWatch tool. (1 basis point equals 0.01%)

The shift to price in a larger-than-usual rate hike came after headlines that Fed officials were contemplating such a move following a surprisingly hot inflation reading as well as worsening economic outlook.

«The change in the headline from 50 basis points to 75 basis points reflects a stark reality but it also reflects the Fed's determination to underscore its commitment to its mandate to maintain price stability,» said Quincy Krosby, chief equity strategist at LPL Financial. «It's neither a trial balloon nor a lead balloon — it's reality.»

Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET following the central bank's policy decision. Investors will be monitoring his language and tone about the Fed's tightening path forward. The central bank will also release its