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 insight on interest rates this week.
After a 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.
The futures for the S&P 500 fell 0.1% to 5,615.25 points, while the Nasdaq futures dropped 0.1% to 20,604.25 points, and the Dow futures slipped 0.1% to 39,647.0 points by 19:12 ET (23:12 GMT).
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 reducing inflation, the Fed remains cautious about trimming rates, as indicated by the minutes of the June meeting.
The possibility of a rate cut gained momentum after weaker-than-expected labor data last week, signaling a potential cooling in the labor market. However, the Fed’s decision will heavily rely on upcoming inflation data due later this week.
The anticipation of a September rate cut drove investors to risk-driven assets, propelling Wall Street to new highs. 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 on Friday.
With over a 72% chance priced in for a 25 basis point cut in September, traders are closely monitoring the upcoming earnings season, starting with major bank reports on Friday. JPMorgan Chase & Co, Wells Fargo & Company, and Citigroup Inc are among the companies set to announce their second-quarter earnings, shedding light on the impact of high interest rates and inflation on corporate performance.
