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Dow Futures Down 25 Pts; Powell Speaks in Europe

Stock Markets Jun 29, 2022 21:18
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By Peter Nurse -- U.S. stocks are seen opening marginally lower Wednesday, continuing the previous session’s selloff as aggressive rate hikes and recession concerns continue to sap risk sentiment.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 25 points or 0.1%, S&P 500 Futures traded 10 points or 0.3% lower, and Nasdaq 100 Futures dropped 32 points or 0.3%.

The major Wall Street indices closed sharply lower Tuesday after U.S. consumer confidence dropped to a 16-month low in June as consumers fretted that the hefty rate hikes needed to curb inflation could result in an abrupt reduction in economic growth.

Cleveland Federal Reserve Bank President Loretta Mester said Tuesday that if economic conditions remain the same, she will advocate for a 75 basis points hike in interest rates at the next monetary policy meeting in July.

The blue-chip Dow Jones Industrial Average closed almost 500 points or 1.6% lower, the broad-based S&P 500 dropped 2%, while the tech-heavy Nasdaq Composite also fell 3%.

The second quarter ends on Thursday, and the S&P 500 is on course for its worst first half of the year since 1970. On a quarterly basis, both the Dow and S&P 500 are on track for their worst performance since 2020, and the Nasdaq since 2008.

Investors will be focusing on comments from Fed Chairman Jerome Powell as he appears on a panel at the European Central Bank’s annual forum in Portugal, while the economic data calendar centers around the latest reading of the first quarter GDP.

In corporate news, Pinterest (NYSE:PINS) is likely to be in the spotlight after long-time Chief Executive Officer Ben Silbermann announced he was stepping down, handing over the reins of the social media platform to Google (NASDAQ:GOOGL) commerce executive Bill Ready.

Tesla (NASDAQ:TSLA) closed its office in San Mateo, California, and laid off roughly 200 employees on its self-styled Autopilot project, in a move seen as accelerating cost-cutting.

Quarterly earnings are due from the likes of domestic merchandise retailer Bed Bath & Beyond (NASDAQ:BBBY), food manufacturer General Mills (NYSE:GIS), and spice maker McCormick (NYSE:MKC).

Oil prices edged higher Wednesday with tight supply worries offsetting concerns about a weaker global economy.

The Organization of Petroleum Exporting Countries and allies are widely expected to confirm another modest production increase scheduled for August when its two-day meeting ends on Thursday, with limited room for a significant boost to output as very few members have the available space capacity.

The official crude inventory data from the U.S. Energy Information Administration last week will be published later in Wednesday’s session, along with last week’s numbers which were delayed due to a system issue.

By 7 AM ET, U.S. crude futures traded 0.8% higher at $112.61 a barrel, while the Brent contract rose 0.6% to $114.53.

Additionally, gold futures traded 0.3% higher at $1,825.75/oz, while EUR/USD traded 0.1% higher at 1.0524.

Dow Futures Down 25 Pts; Powell Speaks in Europe

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