U.S. stock futures were struggling to recover from the latest sell-off as worries about a more hawkish Federal Reserve continued to push up bond yields.
How are stock-index futures trading
- S&P 500 futures
ES00,
+0.23%
were down less than 1 point, or 0.05%, to 3989 - Dow Jones Industrial Average futures
YM00,
+0.20%
rose 29 points, or less than 0.1% to 32892 - Nasdaq 100 futures
NQ00,
+0.32%
added 4.75 points, or 0.05% to 12177
On Tuesday, the Dow Jones Industrial Average
DJIA,
fell 575 points, or 1.72%, to 32856, the S&P 500
SPX,
declined 62 points, or 1.53%, to 3986, and the Nasdaq Composite
COMP,
dropped 145 points, or 1.25%, to 11530.
What’s driving markets
Stock market sentiment is again fragile after Federal Reserve chairman Jay Powell on Tuesday told the Senate Banking Committee that the central bank was prepared to increase the pace of interest rate hikes if data indicated it was warranted to damp inflation.
Powell will give further testimony on Wednesday, this time to the House Financial Services Committee, starting at 10 a.m. Eastern
Powell’s comments have hammered government bonds, forcing short-term yields
TMUBMUSD02Y,
to fresh four-decade highs, as the market increased bets that the Fed may hike rates by 50 basis points in two week’s time, and ultimately take rates as high as 5.65% by the autumn.
The sight of rising implied borrowing costs, and the prospects of a recession they may cause, pushed the S&P 500 stock barometer back below both the 4,000 level and its 50-day moving average.
And this talk of the Fed taking rates ‘higher for longer’ continued to rattle equity investors on Wednesday.
“The global stock sell-off is continuing with investors jolted by the realization that the work of the Federal Reserve in trying to tame wild inflation in the U.S. far from over. Wall Street ended in sharp retreat, and the risk-off sentiment has spilled over to trade in Asia, with European indices also heading for falls in early trading,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown, in a note to clients.
Mohamed El-Erian, advisor to Allianz and Gramercy, wrote in a tweet: “Inflation is forcing major central banks to abandon the policy regime of volatility suppression via floored rates and QE. That’s a source of volatility, as is global economic fluidity. The last thing the economy and markets need is this extra layer of policy-induced volatility.”
Other U.S. economic updates set for release on Wednesday include the February ADP employment report at 8:15 a.m., followed by the trade balance for January at 8:30 am. The JOLTS job openings survey is published at 10 a.m. The Fed’s Beige Book of economic anecdote will be released at 2 p.m. All times Eastern.
Source: https://www.marketwatch.com/story/u-s-stock-futures-unable-to-rebound-from-latest-sell-off-as-more-powell-talk-looms-8c9714e9?siteid=yhoof2&yptr=yahoo