By Peter Nurse
Investing.com - U.S. stocks are seen opening lower Thursday, with the tech-heavy Nasdaq set to underperform as investors digest the latest comments from Federal Reserve Chairman Jerome Powell ahead of key economic data.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was down 10 points, or 0.1%, S&P 500 Futures traded 13 points, or 0.4%, lower, and Nasdaq 100 Futures dropped 120 points, or 0.9%.
Federal Reserve Chair Jerome Powell continued his two day semi-annual testimony on Wednesday, this time to the House of Representatives. He continued to emphasize that the U.S. economy has a long way to go towards recovery, particularly in the labor market, and downplayed the threat of persistently high inflation given the slack in the economy.
The U.S. Treasury 10-year yield has topped 1.45% for the first time since February 2020 on expectations that the additional $1.9 trillion stimulus proposed by the Biden administration, along with the Fed's loose monetary policy, will lead to higher prices.
Household stimulus checks alone could unleash a $170 billion wave of fresh retail inflows to the stock market, according to a Deutsche Bank (DE:DBKGn) research note published Wednesday.
But higher rates could also hit the technology sector especially hard, as the valuation models for - often unprofitable - growth stocks tend to be reliant on low discount rates.
With Powell having now completed his testimony, attention is likely to turn to a number of important economic data releases.
The weekly initial jobless claims numbers will be released at 8:30 AM ET (1330 GMT). At the same time the U.S. Department of Commerce will release its second estimate for fourth-quarter GDP, while January durable goods orders are also due.
In terms of earnings releases, the likes of Best Buy (NYSE:BBY) and Domino’s Pizza (NYSE:DPZ) are due before the opening bell, while Salesforce (NYSE:CRM), Workday (NASDAQ:WDAY), HP (NYSE:HPQ) and newly public companies Airbnb (NASDAQ:ABNB) and DoorDash (NYSE:DASH) are slated to report after the closing bell.
Oil prices pushed higher Thursday, as reduced levels of U.S. production, on the back of last week’s cold snap in Texas, continued to support the market ahead of next week’s meeting of the globe’s top producers.
The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on March 4. They are likely to discuss an easing of oil supply curbs from April given the recent recovery in prices.
U.S. crude futures traded 0.3% higher at $63.41 a barrel, while the international benchmark Brent contract rose 0.4% to $66.41. Both contracts climbed to their highest levels since January 2020 earlier in the session.
Elsewhere, gold futures fell 0.7% to $1,785.40/oz, while EUR/USD traded 0.5% higher at 1.2225.