U.S. stock futures were unchanged Tuesday morning, after the previous session’s intraday setback as traders consider increasing interest rates with anticipations of rising corporate earnings.
The Federal Reserve accelerated plans to reduce the amount of money pouring into the economy through quantitative easing at its December meeting. It will now reduce bond purchases to $30 billion a month and end the program early this year.
If there is a disorganized shifting in rates and the following tightening of financial conditions, the Federal Reserve may adjust the route. Investors are expecting Federal Reserve Chair Jerome Powell’s Senate Banking Committee hearing.
The higher implied volatility caused the options delta to increase, which directed to more selling as hedging pressures aggravated the weakness. Yesterday’s reverse trend in implied volatility decreased options delta value, which led to counterparty buying.