By Peter Nurse
Investing.com -- U.S. stocks are seen opening largely unchanged Tuesday, stabilizing after recent losses as investors fretted that the Federal Reserve's aggressive policy tightening will lead to a recession next year.
At 07:00 ET (12:00 GMT), the Dow Futures contract was up 10 points or 0.1%, while S&P 500 Futures traded 5 points or 0.1% lower, and Nasdaq 100 Futures dropped 25 points or 0.2%.
The three major averages closed lower Monday, on track to end the month and the year in the red. The blue-chip Dow Jones Industrial Average fell more than 160 points or 0.5%, the broad-based S&P 500 dropped 0.9%, while the tech-heavy Nasdaq Composite lost 1.5%.
The Federal Reserve lifted its interest rates again last week, confirming its determination to tame inflation while signaling that its target policy rate could reach above 5%, a higher level than had been previously expected.
The U.S. central bank is well on its way to normalizing monetary policy, in contrast to the Bank of Japan, which widened the range for yield fluctuations in the benchmark government bonds earlier Tuesday, a move that could be a precursor to the central bank eventually tightening policy.
On the economic calendar, Tuesday's focus will be on housing starts, with the rising interest rates contributing to the gloom in the sector, as homebuilder sentiment fell for a 12th month in a row this month.
Also of interest will be updates from FedEx (NYSE:FDX) and Nike (NYSE:NKE) later Tuesday, with the former often seen as a bellwether for global activity, trade and shipping, while the latter reflects the extent of discretionary consumer spending.
Hertz (NASDAQ:HTZ) will also be in the spotlight after U.S. auto safety regulators said earlier Tuesday they are investigating if the car rental giant rented unrepaired recalled vehicles to customers.
Oil prices edged higher Tuesday, helped by rising optimism about a demand pickup from China in the new year as the world's largest importer of crude fully reopens from its COVID restrictions.
Additionally, the U.S. government is aiming to refill its Strategic Petroleum Reserve, beginning with a 3 million barrel buy in February, having run it down to its lowest level in nearly 40 years in an attempt to curb prices.
The American Petroleum Institute releases its estimate of U.S. crude oil stocks later in the session and is expected to show a small drop after the prior week's hefty build.
By 07:00 ET, U.S. crude futures traded 0.5% higher at $75.73 a barrel, while the Brent contract rose 0.2% to $79.98.
Additionally, gold futures rose 1.2% to $1,818.85/oz, while EUR/USD traded 0.4% higher at 1.0642.