New York, Aug. 26 (BNA): US stock index futures fell on Friday as investors worried about hawkish signals from Federal Reserve Chairman Jerome Powell at the annual Jackson Hole seminar amid fears of slowing economic growth.
According to Reuters, Powell’s speech at 1000 AM ET will be scrutinized for any indication that the economic slowdown could alter the course of Fed monetary policy and if the central bank can make a “soft landing”.
Wall Street has fallen since the beginning of this year as investors anticipate significantly higher interest rates and a slowing economy.
However, it has been rallying strongly since June, with the S&P 500 regaining half of its losses for the year on the back of stronger-than-expected quarterly earnings and hopes that inflation has peaked.
Markets are now focused on any clues for the upcoming Federal Reserve meeting in September. On Thursday, Fed officials were uncommitted about the scale of the interest rate increase, but emphasized that they would raise interest rates and keep them there until inflation is squeezed out of the economy.
Traders expect a slightly higher chance of a third 75 basis point hike than a smaller 50 basis point increase by the Federal Reserve, while economists see the central bank raise interest rates by 50 basis points at its meeting next month.
The Fed’s preferred inflation measure, the PCE price index, will also be released later in the day. The core personal consumption expenditures expenditures (PCE) price index likely rose 0.3% in July, after rising 0.6% the previous month.
Investors will also focus on a slew of other economic data ahead of the Fed Chair’s speech for clues about the strength of the economy including consumer spending, personal income and consumer confidence.
At 06:49 a.m. ET, the Dow e-minis was down 89 points, or 0.27%, the S&P 500 e-minis was down 16.5 points, or 0.39%, and the Nasdaq 100 e-minis was down 68 points, or 0.52 %.
High-growth and technology stocks such as Nvidia Corp (NVDA.O) and Apple Inc (AAPL.O) fell in pre-bell trading after posting sharp gains in the previous session.
Dell Technologies Inc (DELL.N) fell 4.9% as it joined its rivals in anticipating a slowdown as hyperinflation and bleak economic prospects push consumers and businesses to tighten their financial constraints.
Gap Inc (GPS.N) surged 6.5% after the apparel retailer reported a surprise quarterly profit, beat revenue estimates and said sales improved in July and August, with easing fuel prices helping lift discretionary spending.
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