By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Tuesday, continuing the previous session’s late rebound ahead of Fed Chairman Jerome Powell’s confirmation testimony.
At 7 AM ET (1200 GMT), the Dow Futures contract was up 80 points, or 0.2%, S&P 500 Futures traded 17 points, or 0.4%, higher and Nasdaq 100 Futures climbed 75 points, or 0.5%.
The major indices on Wall Street clawed back some of their losses on Monday after opening sharply lower on concerns about rising interest rates, with the tech-heavy Nasdaq Composite actually closing higher.
This positive tone is expected to continue Tuesday as investors await U.S. Federal Reserve Chair Jerome Powell's appearance before the Senate Banking Committee.
In his opening remarks for the hearing released in advance, Powell pledged to prevent high inflation from becoming "entrenched," but did not provide clues about the central bank’s timeline and speed of monetary tightening.
Powell will most likely be pressed about how many interest rate rises will be necessary this year. Atlanta Fed President Raphael Bostic, one of the more hawkish voices at the central bank late last year, told The Wall Street Journal he only expects three hikes but that there is a risk that a fourth may be necessary.
“Given how cautious the FOMC has been over the past two years, to the point of appearing snail-like, I am struggling to see them hitting the panic button right now,” said Jeffrey Halley, an analyst at OANDA. “We may be approaching ‘peak Fed-fear’ for now. That could see a sharp jump for equities, a retreat by U.S. yields and the U.S. dollar.”
The main economic data release Tuesday is the Redbook index, an indicator of growth in retail sales, but investors will focus squarely on Wednesday’s consumer price inflation data. This is expected to show headline CPI breaking above 7% year-on-year, approaching a four-decade high.
In corporate news, Tesla (NASDAQ:TSLA) will be in focus after data from the China Passenger Car Association showed the U.S. electric vehicle maker sold 70,847 China-made vehicles in December, the highest monthly rate since it started manufacturing in Shanghai in 2019.
Grocery store Albertsons (NYSE:ACI) is scheduled to report its quarterly results before the bell Tuesday, while Rivian (NASDAQ:RIVN) could be in the spotlight following reports that head of operations Rod Copes left the electric vehicle maker at the end of last month.
Oil prices pushed higher after two days of losses with the globe’s major suppliers continuing to struggle to increase output to match recovering demand.
The market is waiting on U.S. oil and product inventory data from the American Petroleum Institute, an industry group, later Tuesday, followed by data from the U.S. Energy Information Administration on Wednesday.
By 7 AM ET, U.S. crude futures traded 1.5% higher at $79.42 a barrel, while the Brent contract rose 1.5% to $82.09.
Additionally, gold futures rose 0.4% to $1,806.00/oz, while EUR/USD traded 0.1% higher at 1.1339.