Stocks are likely to come under pressure in early trading on Tuesday after ending the previous session nearly flat. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 121 points.
The downward momentum for the markets is partly due to a negative reaction to the Bank of Japan's latest monetary policy decision.
Overnight, the Bank of Japan unanimously decided to retain its target of doubling the monetary base in two years but did not announce any new steps to curb bond market volatility.
The central bank said its money market operations will continue to target an expansion of the monetary base at an annual pace of 60-70 trillion yen, as announced in April. At the same time, the Bank of Japan upgraded its view of the economy.
"The Bank of Japan's Policy Board was content simply to upgrade its economic assessment today," Capital Economics said in a research note. "This disappointed those hoping for further monetary easing in response to the recent volatility in financial markets."
Not long after the open, the Commerce Department is scheduled to release its report on wholesale inventories in the month of April.
The report is not likely to attract much attention, however, with traders looking ahead to the release of key reports on retail sales, jobless claims, and industrial production later in the week.
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