TOKYO – Wall Street was poised to open with gains Wednesday as markets juggle more hawkish comments from Federal Reserve officials along with another batch of corporate earnings.
Futures for the S&P 500 and the Dow Jones Industrial Average each inched up a little more than 0.2% before the bell.
United Airlines rose 5.3% in premarket trading after the carrier posted a much smaller loss than analysts were expecting. United lost $124 million in the first quarter, which it blamed on a three-week grounding of all Boeing 737 Max 9s after a panel blew off an Alaska Airlines Max jetliner in January. United said the grounding cost it $200 million — enough to turn a small profit into a loss for the quarter.
J.B. Hunt shares tumbled more than 7% after the trucking company’s first-quarter profit fell well short of expectations as revenue fell 9% from the same period a year ago.
Tesla took back a small amount of its losses in recent days, rising less than 1% in premarket to $158.46 per share. In a filing with regulators early Wednesday, the electric car maker said it ask shareholders to reinstate a compensation package for CEO Elon Musk potentially worth $55 billion that was rejected by a judge in Delaware this year. The company also seeks to move its corporate home from Delaware to Texas.
On Tuesday, U.S. markets closed lower after opening with gains for the second day in a row as the reality continues to sink in that interest rates may remain elevated for longer than previously thought.
Federal Reserve Chairman Jerome Powell said at an event Tuesday that the central bank has been waiting to cut its main interest rate, which is at its highest level since 2001, because it first needs more confidence inflation is heading sustainably down to its 2% target.
Treasury yields climbed immediately after Powell’s comments. They had already been higher after the Fed’s vice chair made similar comments earlier in the day. High interest rates and bond yields hurt prices for all kinds of investments.
“Appetite for risk-taking remains weak, with Federal Reserve Chair Jerome Powell validating a later timeline for rate cuts, alongside a raft of Fed speakers calling for more patience in easing,” said Yeap Jun Rong, market analyst at IG.
Powell suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.” But he also acknowledged the Fed could cut rates if the job market unexpectedly weakens.
“The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said, referring to a string of reports this year that showed inflation remaining hotter than forecast.
Traders are mostly betting on the Fed delivering just one or two cuts to interest rates this year after coming into 2024 expecting six or more.
Later Wednesday, President Joe Biden is expected to call for a tripling of tariffs on steel from China to protect American producers from a flood of cheap imports. The announcement will come in an address to steelworkers in the battleground state of Pennsylvania.
In Europe, France’s CAC 40 surged 1.3% at midday, while Germany’s DAX rose 0.5%.
Britain’s FTSE 100 added 0.7% after a report showed that inflation in the U.K. fell to its lowest level in two and a half years in March. Some analysts think that could further pave the way for a cut in interest rates soon.
In Asia, Japan’s benchmark Nikkei 225 dipped 1.3% to finish at 37,961.80. Australia’s S&P/ASX 200 edged down nearly 0.1% to 7,605.60. South Korea’s Kospi dropped nearly 1.0% to 2,584.18. Hong Kong’s Hang Seng was little changed, inching up to 16,251.84, while the Shanghai Composite jumped 2.1% to 3,071.38.
In energy trading, benchmark U.S. crude shed 44 cents to $84.92 a barrel. Brent crude, the international standard, fell 49 cents to $89.53 a barrel.
In currency trading, the U.S. dollar ticked up to 154.67 Japanese yen from 154.65 yen. The euro cost $1.0641, up from $1.0617.
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Yuri Kageyama, Associated Press
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