Stock Futures Fall, Investors Eye Powell’s Testimony
Stock futures are indicating a downtrend ahead of the Federal Reserve Chair, Jerome Powell’s second day of Congressional testimony, influenced by a flurry of interest rate hikes by central banks globally.
- Stock futures for major indexes show a fall, with S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and Nasdaq Composite (^IXIC) down by 0.22%, 0.19%, and 0.25% respectively.
- Central banks worldwide are adopting a hawkish stance to counter inflation, which is impacting global market sentiments.
- Tech stocks are leading the downward trend following Powell’s hint at more rate increases.
Worldwide Rate Hikes Impact Stock Futures
Markets are feeling the impact of a recent wave of hawkish decisions by central banks globally. Norway, Switzerland, and potentially the Bank of England have raised their rates to combat soaring inflation levels, reflecting their determination to tackle the hot inflation issue.
Norway raised its rates to the highest level since 2002. Switzerland followed suit, hiking its key rate to a 15-year high. Furthermore, after this week’s unexpected inflation reading, the Bank of England is also expected to raise its rates to a level unseen since 2008.
These interest rate decisions are part of a larger global policy shift toward tightening monetary policy to curb inflationary pressures. However, this hawkish stance is weighing down on market sentiment, leading to a fall in stock futures.
In the U.S, tech stocks have been hit the hardest following Powell’s hint at more rate increases during his testimony to lawmakers. This has cast doubt over the recent bull run in stocks, sending futures lower.