- US futures fell Tuesday, as the Fed commenced a two-day monetary policy meeting.
- Investors expect the central bank to wind down its bond purchases sooner rather than later.
- The spread of the Omicron variant is forcing restrictions on activity in a number of countries, unsettling investors.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
US stock futures fell on Tuesday, as investors awaited the outcome of this week's two-day Federal Reserve meeting, while the spread of the Omicron virus variant prompted new restrictions across a number of countries.
The Fed kicks off a two-day meeting Tuesday. Investors expect the Fed to wrap up its bond purchases more quickly than previously expected and will scour policymakers's comments for any signal on the timing of rate hikes next year.
"The message that the market continues to send is one of expecting a policy mistake, in that near-term rate hikes to tame inflation will choke off longer-run economic growth," Michael Brown, head of market intelligence at Caxton FX, said in a note.
Global shares slid on Monday, after the UK reported its first death from Omicron, while the 7-day moving average of cases in the country rose to 339,112, its highest level since July, according to government statistics.
"Despite increasing evidence that Omicron symptoms are milder, the tone from the UK government over the speed of infections from the variant has become increasingly anxious," Michael Hewson, chief market analyst at CMC Markets, said in a daily note.
Asian stocks were mostly down overnight, as Omicron variant concerns ramped up and after China reported its first case of the variant. In Hong Kong, the government declared over the weekend that those returning from the US will have to quarantine for a week in a state-run facility.
Meanwhile, Japanese Prime Minister Fumio Kishida said introducing guidelines to companies on share buybacks could be appropriate, but cautioned against putting in place stringent regulations. Tokyo's Nikkei 225 fell 0.73% on the back of the news, Deutsche Bank said.