Futures inch higher as traders brace for Powell speech

[August 25, 2023]  (Reuters) - U.S. stock index futures edged higher on Friday ahead of a keenly awaited speech by Federal Reserve Chair Jerome Powell at the Jackson Hole summit that could offer some hints on the direction the central bank would take on interest rates.

Powell is scheduled to deliver a keynote speech at 10:05 a.m. ET (1405 GMT) at a research conference that will see participation from top global central bankers.

Investors will be watching out for signs of a dovish tilt in the commentary, though analysts believe Powell is likely to stick to the Fed's data-dependent rhetoric on interest rates.

"While Powell is unlikely to be anywhere near as hawkish as he was last year, he won't want to declare victory either," said Michael Hewson, chief market analyst at CMC Markets.

"As we already know from recent comments from various Fed officials, it is clear the Fed believes the fight against inflation is far from over, and in that context it's unlikely he will deliver any dovish surprises."

A spate of strong economic data, including a fall in last week's jobless claims, has signaled robust consumer demand and a tight labor market, dampening hopes that the Fed could be close to the end of its rate-hike cycle.

Keeping equities under pressure, the yield on the 10-year Treasury note rose for the second day. Traders' bet that the Fed would pause its rate hikes in September slipped to 80.5% from 89% a week ago, according to the CME Group's FedWatch tool.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. REUTERS/Brendan McDermid/File Photo

Still, the tech-heavy Nasdaq has risen 1.3% this week, largely due a rally in shares of megacap growth stocks in the run up to Nvidia's second-quarter results, which were reported on Wednesday.

Shares of Nvidia were up 1% in premarket trading on Friday after nearly erasing all their gains in the previous session as some traders took profits following a blowout forecast from the chip-designer.

Shares of other megacap growth stocks were mixed, with Tesla up 0.3% and Microsoft flat.

At 5:22 a.m. ET, Dow e-minis were up 70 points, or 0.21%, S&P 500 e-minis were up 8.25 points, or 0.19%, and Nasdaq 100 e-minis were up 7 points, or 0.05%.

Shares of Marvell Technology Inc fell 4.1% after the chipmaker posted a fall in second-quarter revenue, hit by a weak enterprise market.

Hawaiian Electric dropped 21.6% after the county of Maui sued the power company, accusing it of acting negligently by failing to shut down its equipment, sparking wildfires.

(Reporting by Amruta Khandekar; Editing by Shinjini Ganguli)

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