🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

U.S. futures edge lower with central bankers, chip wars in focus

Published 06/28/2023, 07:12 AM
Updated 06/28/2023, 09:13 AM
© Reuters

Investing.com -- U.S. futures edged lower on Wednesday as investors awaited comments from Federal Reserve Chair Jerome Powell, while tech stocks were pressured lower amid reports that Washington is considering new curbs on chip exports to China.

At 06.56 ET (10:56 GMT), the Dow futures contract inched up 10 points, while S&P 500 futures dipped 7 points or 0.1%, and Nasdaq 100 futures were down 65 points or 0.4%.

The losses came after Wall Street rebounded on Tuesday, with the tech-heavy Nasdaq Composite leading the way, rising 1.6%. The blue-chip Dow Jones Industrial Average snapped a six-day losing streak while the S&P 500 rose after falling in five of the last six sessions.

Powell comments

Market sentiment remained subdued ahead of a panel discussion at the European Central Bank’s annual forum in Sintra, Portugal. The panel, which is set to begin at 9:30 ET (13:30 GMT) includes Powell, as well as ECB President Christine Lagarde, Bank of England head Andrew Bailey, and Bank of Japan Governor Kazuo Ueda.

Powell’s comments are expected to underline expectations for additional rate hikes this year.

Data on Tuesday indicated that the U.S. economy remained on a solid footing despite fears over the prospect of a recession, but also indicated that the Fed will likely have to keep hiking.

New orders for key U.S.-manufactured capital goods unexpectedly rose in May, and sales of new single-family homes surged last month, while U.S. consumer confidence rose to an almost one-and-a-half-year high in June.

Investors have narrowed the odds on a July rate hike - traders are now pricing in a roughly 77% chance the Fed will raise interest rates by 25 basis points to the 5.25%-5.50% range, up from 74.4% a day earlier.

Chip wars

Worries over renewed Sino-U.S. trade tensions also weighed after The Wall Street Journal reported that Washington is weighing new restrictions on exports of artificial intelligence chips to China.

Shares in Nvidia (NASDAQ:NVDA), which gets around a fifth of its revenue from China, were down 3.5% ahead of the open, while shares in rival chipmakers Advanced Micro Devices (NASDAQ:AMD) and Micron (NASDAQ:MU) were also lower.

The Commerce Department will stop the shipments of chips made by Nvidia and other chip companies to customers in China as early as July, the WSJ report said.

Bank stress tests

Meanwhile, the U.S. Fed is due to release the results of its annual bank health checks after markets close.

The country's largest lenders, particularly JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) are closely watched by investors.

(Oliver Gray contributed to this item.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.