By Peter Nurse
Investing.com - U.S. stocks are seen opening moderately higher Wednesday, still enjoying the positive tone generated by Fed Chair Jerome Powel’s assurance that the central bank is in no hurry to tighten monetary policy.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 30 points, or 0.1%, S&P 500 Futures traded marginally higher, and Nasdaq 100 Futures climbed 7 points, or 0.1%.
The main equity indices closed higher Tuesday, with the blue-chip Dow Jones Industrial Average gaining nearly 0.2%, the broad-based S&P 500 rising 0.5% and the tech-heavy Nasdaq Composite outperforming, climbing 0.8%, for a new record close.
"We will not raise interest rates pre-emptively because we fear the possible onset of inflation... we will wait for evidence of actual inflation or other imbalances,” Powell said on Tuesday in his testimony before U.S. lawmakers on Capitol Hill.
Wall Street had struggled last week, with the Dow suffering its worst week since late October and the S&P 500 since late February, after FOMC members brought forward the likelihood of interest rate hikes to 2023, a year earlier than previously guided.
Powell may have tried to reassure investors, but a great deal of uncertainty over the timing of interest rate hikes and the tapering of asset purchases still exists. Thus comments from FOMC members Michelle Bowman, Eric Rosengren and Raphael Bostic will be studied, as they are all slated to speak at events throughout the day.
Additionally, the release of the June U.S. PMI numbers will attract attention, with the releases set to corroborate other data showing a strongly recovering economy. The equivalent numbers in Europe earlier Wednesday showed Eurozone business growth accelerated at its fastest pace in 15 years this month.
The earnings season is largely finished, but Winnebago (NYSE:WGO) is set to report quarterly results before the opening bell, while KB Home (NYSE:KBH) is slated after the close.
Crude oil prices pushed to multi-year highs, after strong demand in the U.S. market drained the country’s inventories.
By 7:05 AM ET, U.S. crude was up 0.7% at $73.39 a barrel, a level not seen since September 2018, while Brent was up 0.8% at $75.44, after pushing above $75 a barrel during the previous session for the first time since April 2019.
U.S. inventory numbers from the American Petroleum Institute showed a draw of 7.2 million barrels on Tuesday, continuing a run of large reductions as demand rises in response to a brightening travel season.
Official numbers from the U.S. Energy Information Administration are due at 10:30 AM ET, with expectations for a fifth straight decline in crude stocks.