Stock index futures rose Tuesday with Federal Reserve Chairman Jerome Powell set to present the semiannual report on monetary policy before the Senate.
S&P 500 futures (SPX) +0.3%, Nasdaq 100 futures (US100:IND) +0.5% and Dow futures (INDU) +0.1%.
The 10-year Treasury yield (US10Y) was unchanged at 4.29%. The 2-year yield (US2Y) was flat at 4.64%. See how other yields traded across the entire yield curve here.
Wall Street ended mixed on Monday, with the S&P 500 and Nasdaq Composite closing at record highs.
“When it comes to the U.S. economy, the focus is increasingly on this Thursday’s CPI report for June, and whether that can open the door for a Fed cut as soon as September,” Deutsche Bank’s Jim Reid said.
Powell will speak in front of the Senate Banking Committee today, followed by the House Financial Services Committee tomorrow.
“It’ll be interesting to see if he has any commentary on the weaker data of late,” Reid said.
“The issue is whether Powell will be able to answer any perceptive questions that might be asked. If U.S. inflation is lower than in Europe, why is the Fed not cutting rates? Why emphasize data dependency when data is unreliable and policy works with a lag?” UBS’ Paul Donovan said.
The best to hope for today is probably recognition of some of the recent data weakness, and retaining the option of a September rate cut, Donovan added.
“Powell is likely to emphasize today that the Fed would reduce interest rates rapidly in this scenario, resulting in a further downward shift in rate expectations,” Pantheon Macroeconomics said.
The results of a $58B, 3-year note auction are also due later in the day today.