S&P, Dow, Nasdaq futures tilt lower ahead of Fed Powell's testimony

Stock index futures were slightly lower Wednesday as Fed chief Jay Powell makes his way to Capitol Hill.

Powell faces the House Financial Services Committee at 10 a.m. ET and there are no major economic indicators on which to trade before that.

S&P futures (SPX) were -0.1%, Dow futures (INDU) dipped 0.1%, and Nasdaq 100 futures (NDX:IND) declined by 0.2%.

"Given that the (Fed) decision was only a week ago, it’s likely that Powell will stick to his main themes from the press conference," Deutsche Bank's Jim Reid said. "But it’ll be interesting to see how he frames the Fed’s decision last week, as the decision to pause rate hikes came alongside upgrades to their inflation and growth forecasts, as well as a signal in the dot plot that 2 further hikes were expected by December."

"Powell himself has said that he expects July to be a 'live' meeting, and futures are pricing in a 74% chance that the Fed will deliver a hike next month. But there remains skepticism in markets that the Fed will be able to follow through on that second hike, with current terminal pricing only pointing to 23bps more hikes, rather than the 50bps indicated by the dot plot."

The 10-year Treasury yield (US10Y) advanced by 2 basis points to 3.75% and the 2-year yield (US2Y) was up 1 basis point to 4.71%.

Powell's Q&A could accelerate the yield curve inversion today, ING said. The 2s10s inversion is right at gap of -97 it hit in the previous session, the widest in four decades.

"There were fresh records set at other points on the curve," Reid noted. "For instance, the 1s30s curve inverted to -144bps, which is the most in available data on Bloomberg back to 2002."

Among active stocks FedEx (FDX) fell following weak profit guidance.

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