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Futures contracts tied to the major U.S. stock indexes inched higher at the start of the overnight session Sunday evening as investors awaited comments on the state of the American economy from Federal Reserve Chairman Jerome Powell.
Dow Jones Industrial Average futures rose 50 points, implying an opening loss of about 40 points. S&P 500 and Nasdaq futures were also slightly higher and pointed to declines of about 0.15% for Monday’s open.
The overnight moves Sunday evening followed a red week on Wall Street. The Nasdaq Composite and S&P 500 fell 1.1% and 2.2%, respectively, last week with the latter notching its worst week since March. The Dow industrials finished the week down 2.65% for its third negative week in four and its worst week since April 3.
By the start of Sunday’s overnight trading, investors were awaiting the broadcast of a CBS’ “60 Minutes” interview with Fed chief Powell.
Though the entire interview is set to broadcast starting at 7 p.m. ET, the show aired a segment of Powell’s remarks earlier Sunday. He said the U.S. economy will claw its way back from the current pullback, but that it may not fully recover until a Covid-19 vaccine is complete.
“In the long run and even in the medium run, you wouldn’t want to bet against the American economy. The American economy will recover,” Powell said in an interview with CBS’ “60 Minutes” in an excerpt aired Sunday morning on “Face the Nation.”
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of the year,” the central bank chief said. However, Powell said “for the economy to fully recover … that may have to await the arrival of a vaccine.”
Wall Street’s veteran investors say stocks could be in for choppy trading until it’s clear that state efforts to reopen their economies aren’t met with significant spikes in new cases of Covid-19. A flurry of recent economic data, including record-setting unemployment figures and a 16.4% plunge in April retail sales, show just how abruptly state-imposed business closures impacted the broader U.S. economy.
Patrick Leary, chief market strategist at Incapital, told ‘s Patti Domm that financial markets are looking a little fatigued between abysmal economic data, recent state-by-state efforts to restart business and worries over renewed animosity between the U.S. and China.
“Market reactions to the data have been somewhat muted,” he said. He said stocks on Friday were reacting negatively to threats from China that U.S. companies could be targeted if the U.S. does not ease up on Huawei. “The markets right now don’t need another reason to be pessimistic. It seems like both the bond market and stock market are getting a little tired. Both markets are looking for the next catalyst.”
— ‘s Jeff Cox and Patti Domm contributed reporting.
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