U.S. stock indexes were expected to open lower on Wednesday after a rally in the previous session, with investors focusing on Federal Reserve Chairman Jerome Powell’s testimony to Congress for clues on interest rate hikes and the state of the economy.
Wall Street has been battered in recent sessions as traders wonder if the market has bottomed out following a sharp selloff, fearing aggressive policy action by central banks could trigger a global economic slowdown.
The benchmark S&P 500 index closed 2.45% higher on Tuesday but remained in a bear market, down more than 21% from its January 3 closing high.
“We had a very nice bounce back yesterday, but the factors that have investors worried haven’t changed and they continue to worry that we’re heading into a recession,” said Sam Stovall, chief investment strategist at CFRA Research. At New York.
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“The market will continue its downtrend until we receive additional information that the economy is not as weak as expected.”
Powell is scheduled to testify before the Senate Banking Committee at 9:30 a.m. ET (1:30 p.m. GMT) and before the House Financial Services Committee on Thursday.
Market participants will analyze his comments on how the Federal Reserve will balance economic growth and its plans to tackle decades-high inflation with a series of rate hikes.
The U.S. central bank last week raised interest rates by three-quarters of a percentage point, its biggest increase since 1994. A Reuters poll found economists expect a similar move next month, followed by an increase of half a percentage point in September.
Oil prices slipped more than $5, with the global benchmark Brent hovering around $110.
Devon Energy and Marathon Oil fell about 4.9% and 5.2% in premarket trading to lead the losses among oil and gas stocks.
As of 8:37 a.m. ET, Dow e-minis were down 453 points, or 1.48%, S&P 500 e-minis were down 61.75 points, or 1.64%, and e-minis Nasdaq 100 were down 202 points, or 1.74%.
Shares of megacap growth and technology companies fell. Tesla Inc fell 1.8%, after gaining 9.3% in the previous session in its best one-day performance since Jan. 31.
Boeing Co fell 2.3% after the aircraft maker warned of lingering supply chain issues nearly through the end of 2023.
Kraft Heinz Co rose 1%. Brokerage BMO upgraded the packaged food maker’s stock to “outperform” against “market yield”.