US stocks were set to open slightly lower on Wednesday, after a recent spate of record highs, as investors assessed upbeat economic data that strengthened the prospect of an interest rate hike. Federal Reserve Chair Janet Yellen said on Tuesday, before the U.S. Senate Banking Committee, that delaying a rate hike would be unwise, but did not indicate when the Fed would raise rates. While she painted a largely upbeat picture of the economy, she also expressed uncertainty over economic policy under the Trump administration. Yellen’s testimony before the House Financial Services Committee on Wednesday will be scrutinized for further clues on when the central bank might pull the trigger, as will be comments by three Fed presidents at other scheduled appearances.
Some Fed officials have said it would be prudent to move sooner than later, but traders have priced in a slim chance of a rate hike at the Fed’s March meeting.
“Yellen’s hawkish stand yesterday was well received as investors focused on the upbeat assessment of the economy,” Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
Adding to the recent spate of strong data, reports on Wednesday showed retail sales rose much more than expected last month, while the consumer price index notched its biggest rise in nearly four years as households paid more for gasoline and other goods.
Dow e-minis were up 2 points, or 0.01 percent at 8:57 a.m. ET, with 30,047 contracts changing hands.
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S&P 500 e-minis were down 5 points, or 0.21 percent, with 136,215 contracts traded.
Nasdaq 100 e-minis were down 9.25 points, or 0.18 percent, on volume of 24,669 contracts.
Wall Street’s main indexes have closed at record highs for the past four sessions, sparked by President Donald Trump’s promise on Thursday of a major tax announcement and fueled by Yellen’s comments.
“While the rise continues to feed on itself, a prudent approach of not fighting the tape should be accompanied by being cautious,” Cardillo said.
Among stocks, Dow component Procter & Gamble rose 2.5 percent to $90.05 after activist investor Trian Fund disclosed a $3.5 billion stake in the consumer products company.
AIG slipped nearly 5 percent to $63.55 after the commercial insurer reported a bigger-than-expected quarterly loss.
Shares of Southwest, United Continental, American Airlines rose more than 2 percent after Warren Buffett’s Berkshire Hathaway reported investments topping $2.1 billion in each of the carriers.
Watchmaker Fossil dropped 19 percent to $18.51 after posting fourth-quarter revenue that missed analysts’ expectations.