Futures move higher after Wall St sell-off according to Powell’s comments According to Reuters
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2023. REUTERS / Brendan McDermid
(Reuters) – US stock index futures edged higher on Wednesday as investors understood belligerent comments from Federal Reserve Chairman Jerome Powell prompted a sell-off. pulled off Wall Street a day earlier and focused heavily on upcoming labor market data.
The main US stock indexes fell more than 1% on Tuesday, with the benchmark recording its biggest percentage drop in two weeks, after Mr. Powell told US lawmakers that the Fed is likely to need to raise interest rates more than expected to find a way to tame inflation.
Traders have ramped up bets that the US central bank will raise interest rates by 50 basis points later this month, with money market futures pricing in a 64.1% chance of a rate hike. such a move.
BlackRock (NYSE:NYSE) top fixed-income investor Rick Rieder said the Fed could raise rates to 6% and keep rates there for a long time to combat inflation. Traders now see the Fed funds rate peaking at 5.64% in September.
Meanwhile, a closely watched part of the US Treasury yield curve saw its deepest inversion in more than 40 years on Tuesday. Such a reversal is considered a reliable recession indicator. [US/]
“We are now expecting three new rate hikes and expectations are also growing that there could be a half-percent hike,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. right at the March meeting.”
“It will put more pressure on companies and consumers, and there are growing concerns that the US economy won’t easily slip into a mild recession, but into a recession.”
Powell will testify again before the House Financial Services Committee at 10:00 a.m. ET.
Investors will keep a close eye on February private payrolls numbers and job openings data for January later in the day for clues on the state of the labor market after the January jobs data. The unexpected strength raised concerns that the Fed could keep interest rates higher for a long time.
The ADP report at 08:15 a.m. ET (1315 GMT) is expected to show private employers hired 200,000 workers in February after adding 106,000 jobs in January.
Another set of numbers at 10:00 a.m. ET is likely to show U.S. job openings rose to 10.5 million in January after a surprise increase to 11 million the previous month.
At 5:33 a.m. ET, up 37 points, or 0.11%, up 3.75 points, or 0.09%, and up 13.75 points, or 0.11%.
Among stocks, Tesla (NASDAQ:) Inc fell 1.0% in premarket trading after Berenberg downgraded the stock to “hold” and data showed Chinese passenger car sales had fallen. down 20% in the first two months of this year.
Occidental Petroleum Corp (NYSE: NYSE) rose 2.5% after Warren Buffett’s Berkshire Hathaway (NYSE: NYSE) Inc increased its stake in the oil company to about 22.2%.
WeWork Inc jumped 7.0% after the New York Times reported the flexible workspace provider was in talks to restructure more than $3 billion in outstanding debt and raise more cash.