US pre-open: Futures slightly higher ahead of Powell testimony

Wall Street futures were trading slightly higher ahead of the bell on Tuesday as market participants patiently awaited testimony from Federal Reserve chairman Jerome Powell.

As of 1230 GMT, Dow Jones futures were up 0.01%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.10% and 0.21% firmer, respectively.

The Dow closed 40.47 points higher on Tuesday, extending solid gains recorded in the previous session.

Investors will be zeroed in on congressional testimony from Powell, scheduled to start at 1500, with the central bank head set to deliver remarks on what he considers to be the current state of the US economy and what he anticipates the future will hold for interest rates going forward.

Bond yields were also drawing an amount of investor attention prior to the open, with the 10-year Treasury note trading slightly lower at 3.930% after recently breaking the psychologically important 4% threshold.

Swissquote's Ipek Ozkardeskaya said: "Today, all eyes and all ears are on Federal Reserve Chair Jerome Powell and what he thinks about the latest set of economic data. Since the latest FOMC meeting, we saw a blowout NFP number, an uptick in inflation figures, lower-than-expected decline in the S&P 500 earnings, and overall encouraging economic activity data. And that's a problem

"The fact that the US jobs market, or economic activity don't react to higher Fed rates is a problem for Fed, because it makes the Fed's arms less efficient for fighting against inflation. Many would argue that changes in rates take time to filter into the economy but the Fed's tightening campaign began in November 2021 - 17 months ago, the rate hikes began roughly a year ago. It's about time we start seeing the impact of higher rates through data. Alas, half-a-million NFP read, with the lowest unemployment rate of the past half a decade and uptick in inflation are indeed worrying."

Outside of Powell's testimony, traders will also be looking at January wholesale inventories data from the Census Bureau, due out at 1500 GMT, and consumer credit change figures for the first month of the year at 2000 GMT.

In the corporate space, Dick's Sporting Goods and Squarespace will report earnings on Tuesday.

Reporting by Iain Gilbert at Sharecast.com