Stocks have shown a lack of direction over the course of morning trading on Tuesday, with the major averages bouncing back and forth across the unchanged line after ending the previous session moderately lower.
Currently, the major averages are turning in a mixed performance. While the S&P 500 is up 0.80 points or less than a tenth of a percent at 2,998.76, the Dow is down 29.05 points or 0.1 percent at 27,047.77 and the S&P 500 is down 7.40 points or 0.1 percent at 8,146.14.
The lackluster performance on Wall Street comes as traders seem reluctant to make significant moves ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Fed is widely expected to lower interest rates by another 25 basis points, with CME Group's FedWatch Tool currently indicating a 63.5 percent chance of a quarter-point rate cut.
Traders are likely to pay close attention to the Fed's accompanying statement for clues about the long-term outlook for rates.
Uncertainty about the U.S. response to the recent attacks on Saudi Arabian oil facilities may also be keeping some traders on the sidelines.
President Donald Trump has indicated the U.S. is prepared to respond militarily but has stopped short of definitively blaming Iran for the attacks.
Trump told reporters diplomacy has not been exhausted when it comes to Iran and would not rule out meeting with Iranian President Hassan Rouhani on the sidelines of the United Nations General Assembly next week.
On the U.S. economic front, the Fed released a report showing industrial production rebounded by much more than anticipated in the month of August.
The report said industrial production climbed by 0.6 percent in August after edging down by a revised 0.1 percent in August.
Economists had expected industrial production to rise by 0.2 percent compared to the 0.2 percent dip originally reported for the previous month.
A separate report from the National Association of Home Builders showed an unexpected improvement in U.S. homebuilder confidence in the month of September.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 68 in September from an upwardly revised August reading of 67.
Economists had expected the index to come in unchanged compared to the 66 originally reported for the previous month.
Energy stocks have shown a substantial move back to the downside following the rally seen in the previous session.
The pullback by energy stocks comes as the price of crude oil has fallen sharply after a report from Reuters said Saudi oil production will be restored faster than initially expected.
Crude oil for October delivery is plunging $3.82 to $59.08 a barrel after skyrocketing $8.05 to $62.90 a barrel on Monday.
Oil service stocks have shown a particularly steep drop, dragging the Philadelphia Oil Service Index down by 4.9 percent. The index spiked by 8.8 percent on Monday to its best closing level in over a month.
Steel, banking, and networking stocks are also seeing considerable weakness in morning trading, while gold stocks have moved sharply higher despite a pullback by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index tumbled by 1.2 percent.
The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is just above the unchanged line, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.5 percent.
In the bond market, treasuries are seeing modest strength as traders look ahead to tomorrow's Fed decision. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 1.829 percent.
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