by On Wednesday, US stock index futures were struggling for direction after a number of policymakers for the Federal Reserve made a case for faster hikes in the interest rate to bring down inflation. This was after a series of data releases continued to paint a rather gloomy picture of the economy.
Latest data fuels worries
A report on Tuesday by the Conference Board showed that consumer confidence had reached its lowest level in the last 16 months. Moreover, it was also found that the US economy had contracted in the first quarter due to a record trade deficit. This got market participants worried about the impact on the US economy of hefty hikes in the interest rates.
Therefore, they have turned their attention towards a speech by Jerome Powell, the Chairman of the Federal Reserve, at a forum of the European Central Bank (ECB). They will be tracking his comments for any changes in the hawkish stance of the Fed in order to combat inflation.
Investors were also dealing with a report, which disclosed that Loretta Mester, the President of the Cleveland Federal Reserve, had called for another rate hike of 75 basis points in the July meeting of the central bank if there is no change in economic conditions.
On Tuesday, John Williams, President of the New York Fed, and Mary Daly, President of the San Francisco Fed also spoke in support of additional hikes in the interest rates. They also said that it was unlikely that the rise in borrowing costs would trigger a recession. Market analysts said that participants were not sticking to the sidelines because there was a lot of negative news coming in from different points.
Index performances
The S&P 500 index was on course for its biggest drop since 1970 in the first six months of the year. Likewise, the Nasdaq and the Dow indexes were also headed for recording a decline in the second straight quarter for the first time since 2015.
There was a 0.14% rise in Dow e-minis, or of 42 points, while there was no change in the S&P 500 e-minis. There was a 0.13%, or 15.5 points’ drop in the Nasdaq 100 e-minis. Traders said that the volatility in the market was also because of the portfolio rebalancing at the quarter end.
Individual stocks
Growth stocks recorded declines with Tesla Inc. in the lead and others including Netflix Inc., Apple Inc., Amazon.com all fell between 0.1% and 1% during premarket trading. There was also a 2.9% increase in General Mills Inc., after sales of the Cheerios maker were able to surpass estimates, even though there was a rise in prices.
A 4.1% gain was also recorded in Pinterest Inc., after the social media platform announce that its long-time CEO was stepping down and would be replaced by Bill Ready, a former executive at Alphabet Inc. There was a 12.7% drop in Bed Bath & Beyond, after it reported a fall in its quarterly comparable sales and said its CEO was stepping down.
