S&P 500 futures are flat as Wall Street awaits Powell’s speech on economics

Wall Street will open higher as investors await Fed Chairman Powell's speech

S&P 500 futures were flat Wednesday as Wall Street awaits an afternoon speech on the economy from Federal Reserve Chairman Jerome Powell.

S&P 500 futures were essentially little changed, with the benchmark looking for a three-day losing streak. Futures tied to the Dow Jones Industrial Average lost 18 points. Nasdaq 100 futures rose 0.1%.

Traders were hit with two reports Wednesday morning that added volatility to stock futures. On the one hand, a labor report indicated that the labor market could cool, raising hopes that the Federal Reserve would slow down its aggressive rate hike campaign. On the other hand, an updated third-quarter gross domestic product reading was released, showing that the economy has been stronger than first realized over the past period.

Payroll processing firm ADP said Wednesday that private companies added just 127,000 jobs this month, well below the consensus estimate of 190,000 from economists polled by Dow Jones.

But the Bureau of Economic Analysis also said on Wednesday that third-quarter GDP rose 2.9% year-on-year, according to its second estimate. That was revised higher than the initial estimate of 2.6%.

Powell is due to deliver a speech at the Brookings Institution this afternoon that could provide more insight into the central bank’s thinking about future rate hikes. The Fed meets later this month and is expected to make a smaller rate hike of 0.5 percentage point after four consecutive 0.75 percentage point hikes to contain high inflation. Any signal of a pivot in future rate hikes would likely send markets up.

“This is a Fed-induced recession, so if it does eventually turn, the market should go up pretty quickly,” Steve Grasso, CEO of Grasso Global, said on CNBC’s “Fast Money” Tuesday.

Wall Street is coming out of a mixed session. The Nasdaq Composite lost 0.59% and the S&P 500 lost 0.16%, marking the third consecutive negative day for each. The Dow Jones Industrial Average posted marginal gains to close 3.07 points or 0.01% higher.

Shares have been squeezed by China’s zero-Covid policy and have failed to fully recover from losses even as the country announced steps toward reopening, such as a rise in vaccine coverage for elderly.

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