US pre-open: Stocks to open lower as investors await Yellen speech

US futures pointed to a lower opening on Wall Street as investors eyed a speech by Federal Reserve chair Janet Yellen and other officials.

At 1115 GMT, Dow Jones Industrial Average futures were down 0.53%, S&P 500 futures fell 0.59% and Nasdaq futures were 0.73% weaker.

A prospective interest rate hike at the central bank’s next meeting on 14-15 March will be in focus with the dollar being a key mover.

Chicago Fed president Charles Evans and Richmond Fed president Jeffrey Lacker will speak at 1515 GMT, while Fed Gov Jerome Powell at 1715 GMT and Fed vice-chairman Stanley Fischer will speak at 1730 GMT.

Attention will then fall on Yellen at 1800 GMT.

Craig Erlam, senior market analyst at Oanda said: “Investors have spent the last week in a frenzy trying to position themselves for a possible rate hike in March, having only a couple of weeks ago written one off almost altogether. We’ve now almost swung entirely the other way, with the probability above 75% from below 20% previously.

“Given the intention was clearly to ensure the markets see this meeting as being live, I think the message today will be broadly consistent with what we’ve heard over the last week."

"The risk is that the Fed raises expectations too high for March and doesn’t deliver which will once again have people questioning its credibility. Whether markets fully buy into March could hang on the subtlest of hints today from Yellen, for example whether she talks about the prospect of a hike in March as opposed to upcoming meetings. The latter would give the Fed some leeway heading into the meeting.”

In corporate news, Snap surged 44% in pre-market trade following its debut on the New York Stock Exchange on Thursday, when it closed at $24.53 a 40% rise on its issue price, valuing the company at around $28.4bn.

Chris Beauchamp, Chief Market Analyst at IG said,: “The underwriters and company management will be pleased to see the stock in such high demand, but the easy work is now behind it. Snap is now just another company on the New York Stock Exchange, and will be judged by the same metrics as others of its ilk. It has to show real user growth from this point onwards, and a firm strategy for making money off those users”

There could also be some movement in Facebook shares as chief executive Mark Zuckerberg sold 386,116 shares earlier this week at a weighted average price of $135.97.

Caterpillar was lower in pre-market trade after it said on Thursday that a raid by federal authorities was likely due to a tax issue.

On the data front, Markit services purchasing managers’ index for February will be published at 1445 GMT and the Institute for Supply Management’s nonmanufacturing report at 1500 GMT.