US pre-open: Stocks seen touch higher after Powell-fuelled losses

US futures pointed to a marginally firmer open on Wall Street on Wednesday, with stocks set to recover from a late selloff the day before on the back of hawkish comments from new Federal Reserve chairman Jerome Powell.

At 1220 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.1%.

On Tuesday, stocks ended in the red as Powell’s first congressional testimony did little to soothe investors’ worries about inflation. A hawkish tone signalled that US interest rates were set to continue rising, adding weight to expectations of four rate hikes this year rather than three.

Powell said that his "personal outlook for the economy has strengthened since December", with data that "will in my case add some confidence to my view that inflation is moving up to target".

Amongst the reasons for his optimism, he cited the continuing strength in the labour market, a fiscal impulse, and the global economic expansion.

Rabobank said: "This was a clear shot across the bow from the new Chair, suggesting that - if it is up to him - the FOMC may want to revise its current projections of three hikes for this year up to include a fourth."

Powell is due to make his next appearance on Capitol Hill in front of a Senate committee on Thursday.

On the data front, fourth-quarter GDP and the core PCE are at 1330 GMT, while the Chicago PMI is at 1445 GMT and pending home sales are at 1500 GMT.

The GDP is expected to be revised from 2.6% to 2.5% at the annualised rate. Spreadex market analyst Connor Campbell said that if the data is in line, it "might take the shine off the dollar and give the Dow a bit more room to breathe".

In corporate news, Office Depot could be in for a down day after its fourth-quarter profit beat expectations but sales fell short, while Lowe’s was weaker in pre-market trade after its quarterly profit missed expectations.

Etsy looked set to surge, however, after the online marketplace issued forecast-beating fourth quarter earnings, while Booking Holdings was higher in pre-market trade after better-than-expected quarterly earnings and sales late on Tuesday.