Powell’s Testimony Likely To Drive Early Trading On Wall Street

Early trading on Wall Street on Tuesday is likely to be driven by reaction to congressional testimony from Federal Reserve Chair Jerome Powell.

Ahead of Powell’s remarks, the major index futures are currently pointing to a slightly higher open for the markets, with the S&P 500 futures up by 0.1 percent.

Powell is scheduled to deliver his semiannual monetary policy testimony before the Senate Banking Committee beginning at 10 am ET.

The Fed chief’s prepared remarks are likely to be released ahead of his testimony and could have a significant impact on early trading.

Traders are likely to pay close attention to Powell’s remarks, looking for additional clues about the outlook for interest rates.

“Everyone is expecting Fed Chair Powell to deliver his best hits of ‘we have more work to do’ and ‘higher for longer,” said Edward Moya, senior market analyst at OANDA.

He added, “Powell might not commit how much higher rates will go, but he will keep the door open for the Fed’s dot plots to move higher.”

Not long after the start of trading, the Commerce Department is due to release its report on wholesale inventories in the month of January. Wholesale inventories are expected to decrease by 0.4 percent.

Stocks showed a notable move to the upside in morning trading on Monday but gave back ground over the course of the session. The major averages pulled back well off their highs of the session, ending the day narrowly mixed.

After surging as much as 1.2 percent, the tech-heavy Nasdaq showed a significant pullback and closed down 13.27 points or 0.1 percent at 11,675.74.

Meanwhile, the Dow and the S&P 500 pulled back well off their best levels but closed modestly higher. The Dow crept up 40.47 points or 0.1 percent to 33,431.44 and the S&P 500 inched up 2.78 points or 0.1 percent to 4,048.42.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index slumped by 1.1 percent.

Meanwhile, the major European markets have all moved modestly higher on the day. While the U.K.’s FTSE 100 Index is up by 0.3 percent, the German DAX Index and the French CAC 40 Index are both up by 0.1 percent.

In commodities trading, crude oil futures are falling $0.53 to $79.93 a barrel after climbing $0.78 to $80.46 a barrel on Monday. Meanwhile, after ending the previous session unchanged at $1,854.60 an ounce, gold futures are sliding $11.20 to $1,843.40 an ounce.

On the currency front, the U.S. dollar is trading at 136.04 yen compared to the 135.93 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0668 compared to yesterday’s $1.0681.