In This Article:
Investing.com – Futures slip lower despite optimism over the U.S. economy as investors await commentary from central bankers. Oil prices push higher, while shares in Nvidia look set to lead declines in tech stocks after a report that Washington could restrict exports of artificial intelligence chips to China.
Advertisement: High Yield Savings Offers
1. Futures slip lower
U.S. futures were broadly lower on Wednesday, as data pointing to strength in the U.S. economy was offset by caution ahead of an appearance by Federal Reserve Chair Jerome Powell later in the day which could provide cues on the path of interest rates.
A Wall Street Journal report that Washington was considering new restrictions on exports of artificial intelligence chips to China was also weighing on sentiment.
At 05:10 ET (09:10 GMT), the Dow futures contract edged down 17 points, S&P 500 futures dipped 11 points or 0.2%, and Nasdaq 100 futures were down 73 points or 0.5%.
The three main equity averages rebounded on Tuesday, with the tech-heavy Nasdaq Composite leading the way, rising 1.6%. The blue-chip Dow Jones Industrial Average snapped a six-day losing streak while the S&P 500 rose after falling in five of the last six sessions.
Despite recent market weakness, a rally in growth stocks, an upbeat earnings season and bets that the Fed will soon end its monetary tightening mean the main indexes are on track for quarterly gains.
Ahead of the market open, earnings are due from packaged foods company General Mills (NYSE:GIS) while Micron Technology (NASDAQ:MU) is due to report after the close.
2. Economic optimism
Data on Tuesday indicated that the U.S. economy remained on a solid footing despite fears over the prospect of a recession, but also indicated that the Fed will likely have to keep hiking interest rates.
Separate reports showed new orders for key U.S.-manufactured capital goods unexpectedly rose in May, and sales of new single-family homes surged last month, while U.S. consumer confidence rose to an almost one-and-a-half year high in June.
The U.S. central bank paused rate hikes earlier this month but indicated that two additional rate hikes were warranted this year.
The upbeat data prompted investors to narrow the odds on a July rate hike - traders are now pricing in a roughly 77% chance the Fed will raise interest rates by 25 basis points to the 5.25%-5.50% range in its July meeting, up from 74.4% a day earlier.
3. Central bankers
With central banks sticking to hawkish commentary on the interest rate outlook investors will be paying close attention to a panel discussion at the European Central Bank annual forum in Sintra, Portugal which includes Powell, as well as ECB President Christine Lagarde and Bank of Japan Governor Kazuo Ueda.