US stock futures were flat Tuesday night after the Dow Jones Industrial Average fell nearly 300 points on mounting investor concerns about the state of the economic recovery and the Federal Reserve's next move.
Dow Jones Industrial Average futures ticked 8 points higher, or 0.02%. The futures on the S&P 500 and Nasdaq 100 rose 0.05% and 0.08%, respectively.
In Tuesday's regular trading, the Dow fell 292.06 points, or 0.8%, to 34,577.57, falling after a five-day losing streak on Monday. The S&P 500 was down 0.6% to close at 4,443.05 and the Nasdaq Composite was down 0.5% to 15,037.76.
The Dow, S&P and the small-cap Russell 2000 have now traded in the red for six of the last seven days. Tuesday marked the fifth consecutive loss day for the Nasdaq. September was historically a weak month for the markets, which have seen an average decline of 0.56% per month since 1945, according to the CFRA. And after eight months of profits, strategists say a big pull-out could be imminent.
The S&P 500 has risen throughout the year, falling only once below the 50-day moving average, according to Fundstrat. Mike Wilson, chief investment officer at Morgan Stanley, told CNBC's Fast Money that this might just be the beginning.
“The mid-cycle transition always ends with a correction in the index,” he said of the S&P 500. “Maybe it will be this week, maybe a month from now. I don't think we can handle this year. However, the 50-day moving average holds up year-round because that's the pattern we usually see during this part of the recovery period. "
On Tuesday, the Labor Department released pre-bell data showing less than expected spike in US inflation for the month of August. Consumer prices rose 5.3% yoy and 0.3% yoy. Excluding food and energy, the consumer price index rose just 0.1% for the month.
Initially, the markets recovered, but turned down again after the market opened, as uncertainty arose about when the US Federal Reserve would curb securities purchases.
"The US Federal Reserve is likely to delay its purchases of government bonds and mortgage-backed securities, although there are slight indications that the rise in durable goods prices is temporary, as shown by the fall in used car prices," said Dawit Kebede, chief economist at the National Credit Union . "This is because we are far from maximum employment," one of the Fed's two goals in its dual mandate.
Although the data was cooler than expected, inflation is still running hot, according to Brad McMillan, chief investment officer of the Commonwealth Financial Network.
"We'll likely see inflation at least for the rest of the year and possibly through 2022," he said. "But we are seeing the trend reversal, which shows that the change of basis is taking effect and the economy is healing."
Stocks tied to the economic recovery fell on Tuesday. United Airlines lost 2.1% and Bank of America lost 2.6%. General Electric finished 3.9% lower.
Casino stocks took a big hit as the Macau government tries to tighten regulatory scrutiny over casinos and Chinese health officials reported a Covid-19 outbreak. Las Vegas Sands lost 9.7%, Wynn Resorts lost 10.8%, and MGM Resorts lost 3.9%.
Apple shares closed nearly 1% lower after the company unveiled the iPhone 13 at its annual product launch event.
Wednesday is the last day of the SALT conference in New York City. In terms of economic data, US import and export prices and mortgage application data are due to be released on Wednesday.