Stock Market News: Dow, S&P 500 Set to Open Up
U.S. stock futures were mixed early Wednesday after Federal Reserve Chairman Jerome Powell said progress on bringing down inflation stalled, pushing back the prospect of interest-rate cuts until later in the year.
Dow Jones Industrial Average futures added 10 points, or less than 0.1%. Futures for the S&P 500 were little changed, and those for the Nasdaq 100 fell 0.1%. On Tuesday, the Dow finished 0.2% higher while the other two indexes fell.
Powell said recent data hadn’t given policymakers confidence that inflation is still heading toward the target. Before last week, traders had widely been expecting an interest-rate increase in June, but now that appears much less likely. Combined with rising geopolitical tension after Iran attacked Israel last weekend, the impact has been to put stocks on shaky footing.
Investors continue “to be increasingly skeptical about the chance of rate cuts,” said Deutsche Bank strategist Jim Reid. On Tuesday, “risk appetite was also dampened by ongoing fears about a military escalation in the Middle East.”
The yield on the 10-year Treasury bond fell slightly early Wednesday to 4.652%. It’s still up from below 4% at the start of the year, reflecting expectations of interest rates staying higher for longer. The 2-year yield fell below 5% to 4.975%.
The Fed’s reluctance to cut stands in contrast to the stance of the European Central Bank, which has signaled a reduction in June. That could strengthen the dollar against peers–the dollar index has gained almost 1% over the past five days.