Dow futures rise 20 pts; investors await Powell's comments

March 7, 2023 7:19 AM EST

By Peter Nurse -- U.S. stocks are seen opening with small gains Tuesday, with investors keenly awaiting the latest comments from Fed head Jerome Powell on the state of the U.S. economy and the likely path of monetary policy.

At 07:00 ET (12:00 GMT), the Dow Futures contract was up 20 points, or 0.1%, S&P 500 Futures traded 6 points, or 0.2%, higher and Nasdaq 100 Futures climbed 33 points, or 0.3%.

The main equity indices traded in a muted fashion Monday, after strong gains the prior week. The blue chip Dow Jones Industrial Average gained 0.1%, the broad-based S&P 500 rose 0.1%, while the tech-heavy Nasdaq Composite fell 0.1%.

Powell heads to Capitol Hill this week, starting his two-day testimony in front of the Senate Banking Committee later Tuesday.

Recent robust economic data, as well as soaring U.S. Treasury yields, point to the Fed chair delivering hawkish testimony to lawmakers, with the implied terminal rate holding around 5.50%, suggesting another 75 basis points of hikes to come.

“Interesting for markets today will be whether Powell does say the Fed would be open to 50 bps hikes in the future – presumably, he cannot rule that out. He may also now be drawn out on what the Fed considers the terminal rate,” said analysts at ING, in a note.

Economic data scheduled for release Tuesday include January wholesale trade sales and consumer credit, but the main focus will be the jobs report due out on Friday. Analysts expect the economy to add 200,000 jobs during February, which would be well below the 517,000 created in January.

In corporate news, Meta Platforms (NASDAQ: META) is planning thousands more job cuts in an attempt to restore profitability, according to a Bloomberg report released late on Monday, with an announcement due as early as this week.

Quarterly earnings are expected from the likes of Dick’s Sporting Goods (NYSE: DKS) and personal styling platform Stitch Fix (NASDAQ: SFIX), while WW International (NASDAQ: WW), also known as Weight Watchers, soared 12% premarket after announcing plans to acquire Sequence, a subscription telehealth platform.

Oil prices edged lower, falling back from multi-week highs on renewed optimism that China will see a strong economic recovery this year, resulting in increased crude demand from the world’s largest importer.

The American Petroleum Institute, an industry group, releases its weekly estimate of U.S. inventories later in the session.

By 07:00 ET, U.S. crude futures traded 0.4% lower at $80.11 a barrel, still near a three-week high, while the Brent contract fell 0.5% to $85.75, around a five-week high.

Additionally, gold futures fell 0.4% to $1,846.75/oz, while EUR/USD traded 0.2% lower at 1.0660.

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