Stock futures are flat as investors await Fed Chair Powell’s speech

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, December 7, 2022.

Brendan McDermid | Reuters

Stock futures were flat in overnight trading as investors braced for the latest commentary due Tuesday from Federal Reserve Chairman Jerome Powell.

Futures tied to the S&P 500 inched 0.08% higher, while futures connected to the Dow Jones Industrial Average traded flat. Nasdaq-100 futures added 0.07%.

On the earnings front, Pinterest shares fell 3% after hours on a revenue miss and weak outlook, while Chegg plummeted more than 20% on disappointing guidance.

Monday’s overnight moves followed another down session for markets as bond yields rose and pressured growth stocks. The Dow Jones Industrial Average dipped 34.99 points, or 0.1%, falling for its third consecutive session. The S&P 500 slid 0.61%, while the Nasdaq Composite dropped 1%.

Nine of the 11 major S&P sectors finished lower, led to the downside by communications services. The utilities sector was the best-performing area, gaining 0.87%.

“I think the market is in a reassessment mode, and that’s why you see markets pull back a little bit, certainly post the jobs report, and we’re seeing a little bit more today” said Sinead Colton Grant, global head of investor solutions at BNY Mellon Wealth Management.

A speech from Powell before the Economic Club of Washington on Tuesday remains top of mind for investors. Markets interpreted a slew of his disinflation comments during last week’s post-meeting press conference as dovish and stocks rallied. Many view the appearance as an opportunity for Powell to offer more clarity on where rates are headed, or clarify some comments made after last week’s 25 basis point rate hike.

“I think you will likely see an attempt to perhaps dampen some of the reaction to the statements in the press conference,” Grant said.

Earnings season presses on Tuesday with results from Chipotle, DuPont and Royal Caribbean. So far this season, a little over half of S&P 500 companies have reported earnings, with about 69% surpassing expectations, according to FactSet data.

Investors will also monitor international trade and consumer credit data.

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