US pre-open: Futures mixed following Powell comments

(Sharecast News) - Wall Street futures were in the red ahead of the bell on Friday, putting major indices on a course for a losing week following last week's solid post-election rally. As of 1230 GMT, Dow Jones futures were down 0.39%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.55% and 0.81% lower, respectively.

The Dow closed 207.33 points lower on Thursday after Federal Reserve chairman Jerome Powell indicated that the central bank was in no rush to continue cutting interest rates.

Trade Nation's David Morrison said: "Federal Reserve chair Jerome Powell managed to spook markets during a speech and Q&A session last night. He said that the economy was not giving out signals to suggest that the US central bank should be in a hurry to lower rates. His comment led to a pullback in equities and a rally in bond yields. There was also a sharp reversal in rate cut expectations as measured by the CME's FedWatch Tool. Yesterday morning, the probability of a 25 basis point rate cut at the Fed's FOMC meeting next month stood at 82%. This dropped to 62% in the aftermath of Powell's comments.

"So, once again, there's plenty of uncertainty building ahead of the December meeting. The Fed can blame this on recent data, particularly this week's CPI and PPI releases, but also on what a Trump administration may mean for the US economy. Even though it appeared that both Trump and Powell were in favour of lower rates - the former to goose the economy, the latter to ease the pain of the $1.5trn of real estate loans which reset next year - it's possible that Powell's hawkish tilt will put the pair back on a collision course, reminiscent of their clash during Trump's first term."

On the macro front, October retail sales numbers will be published at 1330 GMT, as will last month's import/export figures and a preliminary reading of November's NY Empire State manufacturing index, while September business inventories data will follow at 1500 GMT.

In the corporate space, shares in semiconductor equipment and services business Applied Materials traded lower after issuing weak revenue guidance, while Domino's Pizza traded higher on the back of news that Berkshire Hathaway had taken a stake in the restaurant chain.

Reporting by Iain Gilbert at Sharecast.com