U.S. stock index futures pointed to a softer start for Wall Street, as investors waited for more clues on interest rate policy when minutes of the early May Federal Open Market Committee meeting are released later in the session.
How are stock-futures trading?
- S&P 500 futures ES00, -0.13% were down 0.2% to 3,933
- Dow Jones Industrial Average futures YM00, -0.19% fell 0.2% to 31,799
- Nasdaq-100 futures NQ00, -0.06% slipped 0.1% to 11,755
On Tuesday, the Dow Industrials DJIA, +0.15% rose 0.2% to 31,928.62, its third-straight gain. The S&P 500 SPX, -0.81% fell 0.8% to 3,941.48, snapping two straight days of gains, while the Nasdaq Composite COMP, -2.35% slumped 2.4% to 11,264.45, its lowest close since Nov. 3, 2020.
What’s driving the markets?
The pullback Tuesday came after a grim warning from Snapchat parent Snap Inc. SNAP, -43.08% that weighed on technology stocks, while weak home sales also drove downbeat sentiment among investors.
Markets may pivot on clues to future monetary policy decisions, when the Fed minutes from the latest monetary policy meeting are released at 2 p.m. Eastern Time.
Read: S&P 500 hovers near bear market. Its ferocity may depend on the economy.
“While the hunt for any mention of a possible 75bps rate hike may be futile, the base case stays at a series of 50bps rate hikes to follow,” said a team of strategists at Saxo Bank. “But investors are also increasingly parsing Fed talk to look for signs of stagflation or economic slowdown and that really is driving the market sentiment for now.”
Fed Chairman Jerome Powell has laid plans for the central bank to boost the benchmark interest rate by half-a-percentage point at the next two FOMC meetings in June and July, bringing it to near 2% by August.
Read: Fed’s Bostic calls for caution as Fed raises rates: ‘Even firetrucks with sirens blaring slow down at intersections’
April durable goods orders and core capital orders data are due at 8:30 a.m. Eastern.
Earnings in focus for Wednesday will be chip maker Nvidia Corp. NVDA, -4.40% and cloud computing–based data warehousing group Snowflake Inc. SNOW, -6.64%. “The worry around Nvidia is to what extent the decline in cryptocurrencies is beginning to weigh on sales due to a slowdown in crypto mining,” said the Saxo strategists.
“Snowflake was one of the hottest IPOs in recent memory attracting even Berkshire Hathaway as one of its investors and top line growth has been strong, but the market is getting increasingly nervous that growth is decelerating faster than initially expected,” they added.
Read: Here’s what KPMG’s U.S. chief is saying about the market downturn, the economy and M&A
Shares of Wendy’s Co. WEN, -2.34% rose 10% in premarket after Nelson Peltz’s hedge fund Trian disclosed plans for possible sale of the burger chain.
Oil prices CL00, +1.28% were higher, and the dollar DXY, +0.44% also gained, with gold GC00, -0.83% moving in the other direction. Bond yields TMUBMUSD10Y, 2.744% were mostly flat.