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Appearing before the Senate Banking Committee, Powell reiterated
his view that more rate hikes are likely in the months ahead.
His comment that the Fed will proceed with caution led the S&P
500 and the Nasdaq pull some gains in the previous session, but
were still set to snap their multiple weeks of gains.
"The ever-present tug of war between bears and bulls seems to be
at an impasse, with markets relatively steady over the week as
investors weigh up the Fed's next move after comments from
Powell suggest hikes are far from over," said Matt Britzman,
equity analyst at Hargreaves Lansdown.
"Investors should strap in for rates to go higher than they
want, for longer than they'd like."
Bond markets are still pricing in one more rate hike of 25 basis
points in July, according to CME Group's FedWatch tool, as
opposed to two more as suggested by Powell.
Richmond Fed President Tom Barkin said he remains unconvinced
that inflation is on a steady path downward, but would not
prejudge what the Fed should do at its July 25-26 meeting.
Yields on the 2-year, which best reflects interest rate
expectations, and 10-year Treasury notes edged lower on Friday.
"The latest data aggravated fears about a potential recession,
which has further dampened risk appetite," a note from Deutsche
Bank said.
S&P Global's Purchasing Managers' Index for both U.S.
manufacturing and services activity, due at 9:45 a.m. ET, will
provide more clues on the strength of the economy.
Investors will also monitor comments from St. Louis Fed
President James Bullard, Atlanta Fed President Raphael Bostic
and Cleveland Fed's President Loretta Mester.
At 6:54 a.m. ET, Dow e-minis were down 109 points, or 0.32%, S&P
500 e-minis were down 22 points, or 0.5%, and Nasdaq 100 e-minis
were down 101.75 points, or 0.67%.
3M Co climbed 3% in premarket trading after the chemical company
reached a $10.3 billion settlement with a host of U.S. public
water systems to resolve water pollution claims tied to "forever
chemicals".
Carmax Inc jumped 11.3% after the used-car retailer reported its
first-quarter results.
(Reporting by Shubham Batra, Shreyashi Sanyal and Shashwat
Chauhan in Bengaluru; Editing by Arun Koyyur)
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