Investing.com– U.S. stock index futures dipped slightly in evening trading on Sunday as investors eagerly awaited Federal Reserve Chair Jerome Powell’s testimony and key inflation data for further insights on interest rates this week.
After a strong surge to record highs on Friday, Wall Street saw futures stabilize as optimism grew that the Fed could potentially start cutting interest rates by September following softer-than-expected data. Powell’s upcoming testimony is anticipated to provide more clarity on this matter.
As of 19:12 ET (23:12 GMT), the S&P 500 futures fell 0.1% to 5,615.25 points, while the Nasdaq futures dropped 0.1% to 20,604.25 points. The Dow futures also slipped 0.1% to 39,647.0 points.
Powell is scheduled to testify before the Senate and the House on Tuesday and Wednesday, respectively, with a focus on monetary policy. Despite some progress in curbing inflation, the Fed remains cautious about initiating rate cuts, as indicated by the minutes of the June meeting.
The possibility of a rate cut gained traction following weaker labor data last week, prompting hopes of a cooling labor market. However, the Fed’s decision will heavily hinge on inflation, with data expected later this week influencing the central bank’s stance on rates.
Meanwhile, Wall Street hit record highs on Friday fueled by expectations of a September rate cut, with investors favoring risk-driven assets. The S&P 500 rose 0.5% to 5,567.19 points, the Nasdaq climbed 0.9% to 18,351.34 points, and the Dow edged up 0.2% to 39,375.87 points.
Traders are now factoring in a 72% chance of a 25 basis point cut in September, up from 57.9% last week.
Looking ahead, the focus this week will also be on the start of the second-quarter earnings season, with heavyweight bank earnings from JPMorgan Chase & Co, Wells Fargo & Company, and Citigroup Inc set to be released on Friday. Market watchers will be keen to see how corporate earnings hold up amid high interest rates and persistent inflation pressures.
