Wall St Set For Subdued Open As Fed Hawks Push For Faster Rate Hikes
U.S. stock index futures struggled for direction on Wednesday after several Federal Reserve policymakers made a case for faster interest rate hikes to tamp down inflation as a string of recent data continued to paint a dour picture for the economy.
The latest data highlighted the contraction of the U.S. economy in the first quarter amid a record trade deficit and followed a Tuesday report that showed U.S. consumer confidence hitting a 16-month low.
Market participants, who are fretting about the impact of hefty rate increases on the U.S. economy, focused on a speech by Fed Chair Jerome Powell at a European Central Bank forum. His comments will be parsed for any change in the Fed's hawkish stance on tackling inflation.
Investors also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same.
San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn.
"They're (markets) not taking it in stride, that's for sure. Right now when you have these sort of negative confluences, all coming together at one time, that keeps people on the sidelines, unwilling to step up and become buyers," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
The benchmark S&P 500 was on track for its biggest drop in the first half of a year since 1970, and along with the Dow and the Nasdaq was headed toward a second straight quarterly decline for the first time since 2015.
At 8:48 a.m. ET, Dow e-minis were up 42 points, or 0.14%, S&P 500 e-minis remained unchanged, and Nasdaq 100 e-minis were down 15.5 points, or 0.13%.
Traders pointed to quarter-end rebalancing of portfolios also feeding into higher volatility.
Shares of Tesla led declines among growth stocks, including Apple Inc, Netflix Inc and Amazon.com Inc, which fell between 0.1% and 1% in premarket trading.
General Mills Inc gained 2.9% after the Cheerios maker's sales surpassed estimates despite higher prices.
Pinterest Inc gained 4.1% after the social media platform said former Alphabet Inc executive, Bill Ready, would replace its long-time chief executive officer who is stepping down.
Bed Bath & Beyond Inc tumbled 12.7% after the home goods retailer reported a drop in quarterly comparable sales and said its CEO, Mark Tritton, had stepped down
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