|
Powell on Thursday said central bank officials "are not
confident" that interest rates are yet high enough to finish the
battle with inflation and would not hesitate to tighten policy
further if needed.
The hawkish comments ended a strong run of gains on Wall Street
which had been driven by expectations that the Fed was done with
its hiking cycle after the central bank kept rates unchanged at
its last meeting.
The S&P 500 and the Nasdaq snapped their longest winning streak
in two years in the previous session.
"With markets having been remarkably jittery in the wake of
Powell’s appearance, the market confidence seen of late clearly
stands on relatively unstable presumptions," said Joshua Mahony,
chief market analyst at Scope Markets.
However, with inflation likely to continue its downward trend,
"there is a strong chance that we see rates remain steady from
here on in," Mahony adds.
Traders have priced in an about 60% chance of a rate cut by the
Fed at the June meeting, compared with expectations of a cut in
May before Powell spoke, according to the CME Group's FedWatch
tool.
While this week has been light in terms of economic data,
investors will get reports on consumer and producer prices as
well as retail sales next week, which will further shape
interest rate expectations ahead of the Fed's December meeting.
The University of Michigan is set to issue a preliminary reading
on its consumer sentiment index for November at 10 a.m. ET.
At 7:02 a.m. ET, Dow e-minis were up 36 points, or 0.11%, S&P
500 e-minis were down 2 points, or 0.05%, and Nasdaq 100 e-minis
were down 33 points, or 0.22%.
The yield on 10-year Treasury note stood at 4.6539%, extending
gains from the previous session after a weaker-than-expected
30-year bond auction and Powell's remarks. [US/]
Megacap growth stocks Alphabet, Nvidia and Tesla fell between
0.5% and 1.2% in premarket trading.
Among other stocks, gaming software maker Unity Software and
hydrogen fuel-cell firm Plug Power plunged 14.9% and 32.0%
respectively, on missing third-quarter revenue estimates.
Illumina shares dropped 10.5% premarket as the gene-testing
company trimmed its full-year profit forecast for the second
straight quarter.
(Reporting by Amruta Khandekar; Editing by Maju Samuel)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
