U.S. stock indexes were set for a lower open on Wednesday after a rally in the previous session, with investor focus squarely on Federal Reserve Chair Jerome Powell’s congressional testimony for cues on interest rate hikes and the state of the economy.
Wall Street has been whipsawed in recent sessions as traders debate whether the market has found a bottom in the wake of a sharp selloff on concerns that aggressive policy moves by central banks could trigger a global economic slowdown.
The benchmark S&P 500 index closed up 2.45% on Tuesday but remained in a bear market, down more than 21% from its record closing high on Jan. 3.
“We got a very handsome rebound yesterday, but the factors that caused investors to be concerned have not changed and they continue to worry that we are headed for recession,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“The market will continue its downtrend until we get additional news that the economy is not as weak as anticipated.”
Powell is scheduled to testify before the Senate Banking Committee at 9:30 a.m. ET (1330 GMT) and the House Financial Services Committee on Thursday.
Market participants will parse his comments for how the Federal Reserve will balance economic growth and its plans to combat decades-high inflation through a series of rate hikes.
The U.S. central bank last week raised interest rate by three-quarters of a percentage point, its largest increase since 1994. A Reuters poll found economists expect a similar move next month, followed by a half-percentage-point rise in September.
Oil prices skid more than $5, with the global benchmark Brent hovering near $110.
Devon Energy and Marathon Oil dropped about 4.9% and 5.2% in premarket trading to lead losses among oil and gas stocks.
At 08:37 a.m. ET, Dow e-minis were down 453 points, or 1.48%, S&P 500 e-minis were down 61.75 points, or 1.64%, and Nasdaq 100 e-minis were down 202 points, or 1.74%.
Shares of megacap growth and technology companies slipped. Tesla Inc was down 1.8%, after gaining 9.3% in the previous session in its best one-day performance since Jan 31.
Boeing Co dipped 2.3% after the planemaker warned of supply-chain problems persisting almost until the end of 2023.
Kraft Heinz Co rose 1%. Brokerage BMO upgraded the package food maker’s stock to “outperform” from “market perform”.