U.S. stock futures were little changed on Thursday night after hawkish remarks from Federal Reserve Chairman Jerome Powell hinted that a half-point rate hike was likely next month, sending all three down. major indices during Thursday’s session.
S&P 500 contracts fell 0.03%, Dow Jones Industrial Average futures fell 3 points and Nasdaq futures fell 0.03% ahead of overnight trading day. Meanwhile, Treasury yields continued to climb, with the benchmark US 10-year at 2.92%, the highest level since December 2018.
Speaking at a panel hosted by the International Monetary Fund on Thursday, Powell said a 50 basis point rate hike was “on the table” for May when the U.S. central bank holds its next rate-setting meeting. policies. The Fed Chairman also reiterated that Fed officials had pledged to “upload” inflation-fighting efforts.
“We are really committed to using our tools to get inflation back to 2%,” Powell said in a speech to European Central Bank President Christine Lagarde and other policymakers, referring to the goal. the Fed’s annual price increase.
“We’re definitely in the cards for a 50 basis point rate hike at the May meeting,” Capital2Market President Keith Bliss said. said on Yahoo Finance Live Thursday (video above). “The market is good enough to dictate, if not indicate, where this is going to go.”
With the consumer price index at its highest level in four decades, the US Federal Reserve recently signaled that aggressive monetary tightening is underway to rein in rising prices despite warnings from experts that moving too fast could lead to economic contraction.
“The big question is whether earnings can really support this kind of slowing growth macroeconomic backdrop and Fed policy,” said Deepak Puri, chief investment officer of Deutsche Bank Wealth Management. said on Yahoo Finance Live earlier this week. “It seems like some companies can – historically they can. What’s different this time around is really the trifecta, which is higher costs of capital, quantitative tightening, plus a lack of… big fiscal stimulus.
Despite Wall Street concerns about upcoming policy moves and the risks posed to traders, a reading of the Federal Reserve’s recently released Beige Book suggests that Main Street sentiment remains broadly positive.
Strategists at LPL Research said the Beige Book Barometer could provide a more accurate picture of the economic outlook than current consumer sentiment, which has been weak amid soaring inflation. Despite an economic slowdown in the first quarter, data from Washington has exceeded consensus expectations in recent weeks.
“Looking at the Fed’s most recent beige book, local US businesses remain resilient despite elevated uncertainty,” said Barry Gilbert, financial asset allocation strategist at LPL. “Inflation, COVID and the conflict in Ukraine will keep uncertainty elevated in the near term, but if we can overcome these challenges, we believe there is strong prospects for a pickup in growth in the second half of the year. “
6:53 p.m. ET: Stock futures muted after Powell’s hawkish remarks send indices tumbling
Here’s where the shares were trading ahead of Thursday’s night session:
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc