The major U.S. index futures are pointing to a nervous start on Wall Street as investors look ahead to a slew of Fed speeches scheduled for the remainder of the week.
U.S. stocks closed Tuesday’s session moderately lower after the results of the Institute for Supply Management’s service sector survey showed the business activity index rose for a second straight month in August, rising to the highest level since December 2021.
The strong data spooked the market, which has remained jittery about a potentially aggressive Fed rates trajectory.
Technology and energy stocks led the declines, while retail estate stocks showed notable strength. Hedge fund manager Louis Navellier attributed the downward pressure on tech names to their relatively more vulnerability to potential earnings estimate cuts on top of P/E compression.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | -0.74% | 11,544.91 | |
| S&P 500 Index | -0.41% | 3,908.19 | |
| Dow Industrials | -0.55% | 31,145.30 |
The major averages continued to stay at their lowest level since July 18.
“We're overdue for a bounce after so many days in a row in the red. The market is trading as if a recession is nearly assured but with unemployment so low and job listings so high, it would be unprecedented to see demand collapse quickly,” Navellier said.
Here’s a peek into index futures trading:
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | +0.24% | |
| S&P 500 Futures | +0.21% | |
| Dow Futures | +0.19% | |
| R2K Futures | -0.38% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was rising 0.14% to $391.32 and the Invesco QQQ Trust (NASDAQ:QQQ) was moving up 0.18% to $293.59, according to Benzinga Pro data.
Fed speakers dominate Main Street events scheduled for the day.
- Richmond Federal Reserve Bank President Tom Barkin is scheduled to speak at 9 a.m. ET.
- Cleveland Federal Reserve Bank President Lorretta Mester will speak at an MNI virtual event at 10 a.m. ET.
- Federal Reserve Vice Chair Lael Brainard is scheduled to discuss the U.S. economic outlook at 12:35 p.m. ET.
- The Federal Reserve is set to release its Beige Book at 2 p.m. ET, and it would provide anecdotal evidence of economic conditions in the 12 Federal Reserve districts.
- Around the same time, Fed’s Vice Chair of Supervision Micahel Barr will speak on financial system fairness and safety.
Ahead of the market open, the U.S. Census Bureau’s trade balance report for July is due. Economists expect a narrower deficit of $70.30 billion for the month.
See also: How Much Further Will The S&P 500 Drop?
Stocks In Focus:
- Apple, Inc. (NASDAQ:AAPP) shares are in focus as the company gears up to unveil a slew of hardware, including its latest iPhones.
- Chinese electric vehicle maker Nio, Inc. (NYSE:NIO) is moving to the downside following its quarterly earnings announcement.
- Business spends management software maker Coupa Software Incorporated (NASDAQ:COUP) is advancing solidly after it reported its second-quarter results.
Commodities, Global Markets
Crude oil futures are moderately higher after the more than 2% plunge on Tuesday, and this could potentially generate some strength in the energy space.
The major Asian markets fell across the board, as investors remained cautious ahead of the deluge of Fed speeches and central bank decisions from Canada and the European Central Bank (ECB). The Chinese market, however, carved out modest gains.
Stocks in Europe are testing waters ahead of Thursday’s ECB meeting.
