Sentiment remains bearish ahead of the FOMC statement tonight at 7pm. The stock market has already come under pressure in anticipation of some bad news from tonight's statement. Janet Yellen said that interest rates will remain low for a long time but given the strengthening US economy in recent weeks she may well change her tune tonight.
Recent economic numbers, in particular the job report, have been above expectations so tonight the FOMC statement could hint at higher rates coming soon. This would be negative for the stock market, the decline could accelerate after 7pm.
In Asia, markets are lower after China's consumer inflation cooled slightly more than expected in June. Investors are also cautious before the earnings season. Alcoa (NYSE:AA) was the first US Company to post earnings that beat expectations, the share was little changed in after hours.
In a period of negative sentiment I do not expect the earnings reports to have any significant impact on the market. Both FTSE 100 and S&P 500 should drift lower in coming days.