U.S. Stocks May Open Higher In Reaction To Powell's Prepared Remarks

wallstreet1 up 032918 10jul19

Stocks may move to the upside in early trading on Wednesday following the release of Federal Reserve Chairman Jerome Powell's prepared remarks before the House Financial Services Committee. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 48 points.

Early buying interest may be generated in reaction to Powell's prepared remarks as the Fed chief is set to begin two days of testimony on Capitol Hill.

Powell says in his prepared remarks that economic data received since the Fed's June meeting suggests trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.

The Fed Chairman notes the Fed pledged after the June meeting to "act as appropriate" to sustain the economic expansion, pointing out many participants saw the case for a somewhat more accommodative monetary policy had strengthened.

Powell's prepared remarks seem to have renewed optimism that the Fed could cut interest rates as soon as its next meeting later this month.

Strong jobs data released last Friday had dented hopes for a near-term rate cut, leading the major averages to pull back off record highs.

Nonetheless, some traders may wait for the question-and-answer portion of Powell's testimony as they look for more solid clues about the outlook for rates.

The Fed is also scheduled to release the minutes of its June meeting later today, with the minutes potentially providing some additional insight.

After coming under pressure early in the session, stocks turned mixed over the course of the trading session on Tuesday. Traders largely seemed reluctant to make significant moves ahead of Congressional testimony by Federal Reserve Chairman Jerome Powell.

The major averages showed significant moves to the upside going into the close, with the S&P 500 joining the tech-heavy Nasdaq in positive territory.

Partly offsetting the losses posted in the two previous sessions, the Nasdaq climbed 43.35 points or 0.5 percent to 8,141.73 and the S&P 500 inched up 3.68 points or 0.1 percent to 2,979.63.

Meanwhile, the Dow briefly peeked above the unchanged line but ended the session down 22.65 points or 0.1 percent at 26,783.49.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.2 percent, the U.K.'s FTSE 100 Index is up by 0.1 percent and the French CAC 40 Index is up by 0.3 percent.

In commodities trading, crude oil futures are jumping $1.45 to $59.28 a barrel after rising $0.17 to $57.83 a barrel on Tuesday. Meanwhile, after inching up $0.50 to $1,400.50 an ounce in the previous session, gold futures are climbing $9.40 to $1,409.90 an ounce.

On the currency front, the U.S. dollar is trading at 108.61 yen compared to the 108.85 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1247 compared to yesterday's $1.1208.

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