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U.S. equity futures moved higher again Tuesday, following on from another record high on Wall Street last night, as investors looked to the first of two key appearances on Capitol Hill from Federal Reserve Chairman Jerome Powell.
Powell, who will make a prepared statement and take questions today from the Senate Banking Committee is expected to reiterate the Fed’s view that more data in needed before officials can find confidence that inflation is returning to the central bank’s 2% target and begin cutting interest rates.
Labor market data may prove to be the key factor in the Fed’s decision-making, however, following last Friday’s June jobs report that showed solid new hiring of 206,000 but slowing wage gains and big downward revisions to prior month’s tallies.
Fed Chair Jerome Powell will make the first of his two appearances on Capitol Hill this week later today in front of the Senate Banking Committee.
Image source: Graeme Jennings-Pool/Getty Images
The National Federation of Independent Business, meanwhile, reported Tuesday that companies continue to find it difficult to fill jobs in unskilled sectors, but see some loosening in the market for those with higher levels of expertise.
Related: Analyst revamps S&P 500 target ahead of CPI inflation report
Traders are still pricing in little chance of a rate move from the Fed later this month in Washington, but see the odds of a cut in September at around 77%, according to the CME Group’s FedWatch.
Benchmark Treasury bond yields are starting to reflect that optimism, as well, with 10-year notes down around 6 basis points from the start of the month to around 4.286% heading into the start of the New York trading session and 2-year notes pegged at 4.626%.
That’s giving another boost to stocks, which are set to extend their record run at the opening bell with a 14 point gain for the S&P 500 and an 82 point advance for the tech-focused Nasdaq.
The Dow Jones Industrial Average, meanwhile, is priced for a more modest 50 point bump at the start of trading.
Stocks on the move include Intel (INTC) , which has bounced more than 10% over the past four session and is marked 3.4% higher in premarket trading at $35.16 each.
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In overseas markets, stocks in Europe edged lower in early trading, with the Stoxx 600 down 0.11% and the FTSE 100 little-changed from yesterday’s close, as bond markets digested the impact of France’s weekend elections on relations between Paris and the broader European Union.
Overnight in Asia, last night’s rally on Wall Street, as well as a modest easing in the yen, helped the Nikkei 225 rise 1.96% to a fresh record high of 41,580.17 points, while the regional MSCI ex-Japan benchmark gained 0.43% into the close of trading.
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