US pre-open: Stocks set for muted open ahead of more Fed speak

US futures pointed to a muted open on Wall Street as European shares fell into the red, while the dollar backed off highs, having rallied after Federal Reserve chair Janet Yellen hinted at a rate hike next month.

At 1140 GMT, Dow Jones Industrial and S&P 500 futures were down 0.1%, while Nasdaq futures were flat.

Meanwhile, oil prices were little changed. West Texas Intermediate was down 0.1% to $45.37 a barrel and Brent crude was 0.1% firmer at $46.52.

On Thursday, Fed chair Janet Yellen suggested in her testimony before Congress that the central bank could move on rates “relatively soon” as the economy is strong enough to withstand this.

“At this stage, I do think that the economy is making very good progress toward our goals, and that the judgment the [Fed policy] committee reached in November still pertains,” she told the Joint Economic Committee.

Yellen’s comments pushed up the dollar, while yields on the 10-year Treasury note hit a high for the year.

However, by early Friday the dollar was coming off its highs, trading flat against the euro, up just 0.1% versus the yen and down 0.1% against the pound.

IG’s Joshua Mahony said: “The dollar is once more at the forefront of investors mindsets, as the incessant rise which has dominated the post-election period continues apace. In a high growth environment, it is likely we will see investors moving into the US as a source of capital appreciation. However, the hesitancy seen in US stock markets is a clear nod to the fact that with such dollar appreciation comes an environment which is progressively more difficult for US exporters.”

Fed officials William Dudley, Charles Evans, Esther George, Robert Kaplan and Jerome Powell are all due to speak later on Friday.

In Europe, investors were digesting comments by European Central Bank chief Mario Draghi, who hinted at the European Banking Congress in Frankfurt that the bank is likely to extend its €1.7trn bond-purchase programme next month.

“Despite the uplift to prices provided by the gradual closing of the output gap, a sustained adjustment in the path of inflation still relies on the continuation of the current, unprecedented financing conditions,” he said.

"It is for this reason that we remain committed to preserving the very substantial degree of monetary accommodation, which is necessary to secure a sustained convergence of inflation towards level below, but close to, 2% over the medium-term.”

In corporate news, Abercrombie & Fitch and Foot Locker were due to report earnings before the open.

Salesforce surged in pre-market trade after its third-quarter results late on Thursday beat expectations, but Applied Materials was om the back foot after it posted lower-than-expected sales for the fourth quarter.