U.S. stock-index futures were mostly lower Thursday as investors awaited the final day of congressional testimony from Federal Reserve Chairman Jerome Powell and sifted through a clutch of economic data, including a decline in first-time applications for jobless benefits.
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On Wednesday, the Dow
DJIA,
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Hand-wringing about global economic growth was revived early Thursday, with benchmark bond yields skidding lower, as investors awaited a second day of testimony before lawmakers by Powell.
In the first day of testimony Wednesday, the central bank chief told lawmakers on Wednesday that pandemic-related supply-chain bottlenecks created “just the perfect storm of high demand and low supply,” which “should partially reverse as the effects of the bottlenecks unwind.”
Powell is slated to testify before the Senate Banking Committee at 9:30 a.m. Eastern Time.
Powell said Wednesday that, with expectations that pricing pressures will eventually fade, the central bank was in no hurry to pare purchases of Treasurys and mortgage-related assets, which are currently running at $120 billion monthly, and described the economy as “still a ways off” from meeting the Fed’s self-described goals of “substantial further progress.”
How long pricing pressures will persist is perhaps the big question dogging financial markets presently.
“These nagging concerns about inflation, transitory or otherwise have continued to dominate sentiment, while worries over the pace and persistence of rising prices, appear to be tempering optimism over the wider global recovery story,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a Thursday research note.
First-time claims for U.S. unemployment benefits fell to 360,000 last week, the Labor Department reported Thursday, down from 386,000 the previous week.
The Philadelphia Fed’s factory index fell to 21.9 in June from 30.7 in prior month. Separately, the New York Fed’s Empire State Index jumped 25.6 points to a record-high reading of 43 in July. Economists had expected a reading of 17.3, according to a survey by The Wall Street Journal.
Any reading above zero for either index indicates improving conditions.
Meanwhile, the spread of the delta variant of coronavirus was also stoking anxieties on Wall Street. Dr. Francis Collins, director of the National Institutes of Health told CNN Wednesday that the “delta variant is spreading, people are dying, we can’t actually just wait for things to get more rational.”
“We’re losing time here,” the public health professional said as the U.S. vaccine program has slowed with 48.2% of the population fully inoculated, according to a tracker from the Centers for Disease Control and Prevention.