U.S. Equity Futures Trading Declines Ahead of Powell’s Comments

U.S. equity futures traded lower ahead of the Federal Reserve’s economic and interest rate projections on Wednesday afternoon to be announced by Fed Chairman Jerome Powell.

Teleprinter	security	Latest	Change	Change%
I: DJI	MEDIUM DOW JONES	32825.95	-127.51	-0.39%
SP500	S&P 500	3962.71	-6.23	-0.16%
I: COMP	NASDAQ COMPOSITE INDEX	13471,567189	+11.86	+ 0.09%

Economists expect Fed Chairman Jerome Powell to try to convince nervous financial markets that the central bank can continue to provide support without triggering inflation.

These concerns have recently pushed bond yields higher, undermining demand to buy stocks.

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The Fed meeting “has the potential to allay or exacerbate some of the recent market concerns about soaring bond yields,” said Jingyi Pan, senior market strategist at IG in Singapore.

Jeffrey Halley, senior Asia-Pacific market analyst at OANDA, said US Secretary of State Antony Blinken’s comments on China during his visit to Japan and South Korea also dampened regional sentiments.

“The comments suggest that relations between the two superpowers remain as troubled as ever and do not bode well for tomorrow and Friday’s meeting between senior officials of the two countries. This fact adds to the gloomy mood on mainland China, ”said Halley.

Blinken, after he and Defense Secretary Lloyd Austin met with their Japanese counterparts on Tuesday, denounced China, saying: “We will push back if necessary, when China resorts to coercion or aggression to get his way.”

Wall Street capped off a choppy trading day with indexes mostly closing lower. Losses by banks, industrials and businesses that rely on consumer spending, including cruise line operators, have outpaced gains in stocks in major tech and communications services.

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The S&P 500 fell 0.2% to 3,962.71. The Dow Jones Industrial Average lost 0.4% to 32,825.95. The Nasdaq resisted the trend, benefiting from the rebound in technology stocks and advancing 0.1% to 13,471.57.

The big names in tech that exploded in 2020 were among the winners. Apple grew 1.6%, Google’s parent Alphabet added 1.4%, and Facebook rose 2%.

Small business stocks have lagged the market as a whole. The Russell 2000 Index lost 1.7% to 2319.52.

Investors weighed in on new economic data Tuesday that showed Americans slashed spending last month, partly due to bad weather in large areas of the country that kept shoppers away from stores, and partly because of the exhaustion of stimulus payments for December and January.

Seasonally adjusted retail sales fell 3% in February from the previous month, the US Department of Commerce said on Tuesday. February’s drop follows surging sales in January, with people spending $ 600 on stimulus checks sent out late last year. In fact, the Commerce Department revised the increase in January to 7.6% from the 5.3% previously reported.

Meanwhile, harsh winter conditions caused industrial production to fall 2.2% in February, reflecting a sharp drop in industrial production.

“We are still in the process of getting back to a more normal environment,” said Jason Pride, director of private banking investments at Glenmede. “Given the lump sum nature of the government’s stimulus payments, we’re going to see the numbers jump.”

Investors are betting big that this economic malaise will dissipate as spring rolls around and more Americans get vaccinated against the coronavirus. Additionally, President Joe Biden’s administration began sending $ 1,400 stimulus checks to individuals last weekend.

Meanwhile, Asian stocks fell on Wednesday as global markets cautiously awaited the US central bank’s latest assessment of the economy.

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Japan’s Nikkei 225 benchmark fell less than 0.1% to close at 29,914.33. South Korea’s Kospi slipped 0.6% to 3,050.17. The Australian S & P / ASX 200 fell 0.5% to 6,795.20. The Hong Kong Hang Seng was down nearly 0.1% to 29,014.67, while the Shanghai Composite was little changed, down less than 0.1% to 3,444.70.

In energy trading, benchmark US crude rose 47 cents to $ 65.27 a barrel on electronic trading on the New York Mercantile Exchange. He lost 59 cents to $ 64.80 on Tuesday. Brent, the international standard, gained 45 cents to $ 68.84 a barrel.

In currency trading, the US dollar rose from 108.99 yen to 109.08 Japanese yen. The euro cost $ 1.1907, compared to $ 1.1903.

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Damian J. Troise and Alex Veiga, Editors of AP Business, contributed.