• Crude prices were cooling after posting historic gains on Monday due to weekend's drone attack on Saudi oil facilities.
  • Fed policymakers later Tuesday are due to convene a two-day policy meeting at which investors generally expect the central bank to announce an interest rate cut.

NEW YORK: US stocks were treading water at Tuesday's open as oil prices retreated and investors grew cautious ahead of a Federal Reserve policy meeting.

Crude prices were cooling after posting historic gains on Monday due to weekend's drone attack on Saudi oil facilities, which took an estimated five percent of global capacity offline.

About 10 minutes into the day's trading session, the benchmark Dow Jones Industrial Average was 0.2 percent lower at 27,020.44.

But the S&P 500 and Nasdaq were both flat at 2,996.89 and 8,153.95 respectively.

Fed policymakers later Tuesday are due to convene a two-day policy meeting at which investors generally expect the central bank to announce an interest rate cut.

However, futures markets on Tuesday showed rapidly mounting odds that the central bank might hold its fire.

Some recent economic data have showed resilience and rising inflation.

“Right now, there just isn't much buying interest," analyst Patrick O'Hare wrote at Briefing.com, saying anticipation of the Fed meet was causing hesitation.

The Fed also reported Tuesday that industrial output had seen its biggest surge in a year last month, buoyed by a large gains in manufacturing, which had fallen into recession in the first part of the year.

Among individual companies, hardware and home improvement retail chain Home Depot was down 0.8 percent after its stock was reportedly downgraded.