US Futures Steady Ahead of Key Speech by Fed Chair Powell

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Principal Points

• Futures contracts hover flat to the downside ahead of Fed Chair Powell comments
• Bitcoin trades above $40,000, up 35% for the past eight sessions

US stock futures are holding steady during overnight trading on Wednesday after major stock gauges snapped a five-day winning streak, retreating from their fresh records set earlier in the week. Futures contracts tied to the S&P500, the Dow Jones, and the Nasdaq Composite all gravitate toward the flatline ahead of the opening bell in New York.

The eventful week that’s seeing volatility rise as the days go by is bound to become even more significant today. As trading kicks off, the Big Tech companies that reported stellar results on Tuesday after the market closed, are looking to open mixed.

Apple and Microsoft, the first and second-largest US companies by market cap, posted soaring profits and revenue figures for the quarter ended June. Their shares, however, turned lower on weak guidance and projections that the upward trajectory would most likely not be sustained.

Google’s Alphabet also delivered quarterly financials yesterday. The company blew past analyst estimates as its business was propelled by strong advertising growth amid the economic reopening. The stock rose over 3% in after-hours trading.

Anticipation for FOMC Meeting Wrap-Up

Apart from tech giants entering the trading day right after the corporate earnings have been released, the market will be focused on today’s wrap-up of the two-day FOMC meeting. The 18 members of the Federal Open Market Committee gathered yesterday for their monetary policy meeting to discuss looming challenges for the US economy.

The Committee is expected later today to release a statement that would be followed by remarks from Chairman Jay Powell at a news conference. The market is largely expecting to hear more on the major issues, including inflation, interest rates, and steps toward reducing bond purchases.

While it’s too soon for the US central bank to announce a specific date on when Fed officials will make their first move to ease asset purchases, investors will anticipate hearing how the Fed intends to tackle rising inflation pressures in the medium-term.

In previous speeches, Chairman Powell has reiterated the Fed views the current surge in prices as a transitory element of the rapidly expanding economy. In his view, once the economic activity reaches a balanced state, the one-off factors causing prices to rise will dissipate, leading to a drop in the rate of inflation.

In Europe, markets opened slightly to the upside on Wednesday as investors attempt to recover yesterday’s losses across the board. Stocks declined broadly on Tuesday with the Stoxx Europe 600 losing 0.54%, finishing in the red for a second consecutive session.

Bitcoin and crypto assets on Wednesday are pushing higher on renewed optimism. The leading token today reached as high as $40,300, or a gain of over 6% on the day. Market participants recently shifted the

sentiment from bleak and stagnant to positive and promising. Boosted by a series of positive comments from Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, and an Amazon job posting from last week, bitcoin is now trading in its eighth straight session of gains. For that period, the original cryptocurrency has added over 35% to its valuation.