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Market Snapshot: Dow, S&P 500 turn negative as Fed’s Powell delivers a second day of testimony

U.S. stock index futures on Thursday pointed to a higher start, with the hard-hit technology sector seeing some relief from the recent downturn in bond yields.

What’s happening

Futures on the Dow Jones Industrial Average

rose 33 points, or 0.1%, to 30504

Futures on the S&P 500

gained 12.5 points, or 0.3%, to 3775

Futures on the Nasdaq 100

increased 79 points, or 0.7%, to 11645.

On Wednesday, the Dow Jones Industrial Average

fell 47 points, or 0.15%, to 30483, the S&P 500

declined 5 points, or 0.13%, to 3760, and the Nasdaq Composite

dropped 16 points, or 0.15%, to 11053.

What’s driving markets

The focus of investors is whether the U.S. economy is headed for a recession. Federal Reserve Chair Jerome Powell on Wednesday testified a recession was a possibility even as he stuck to his message that the economy is strong enough to withstand a series of interest-rate hikes.

“The ‘unconditional’ notion that the Fed would be prepared to tolerate a recession if that is ultimately required to tame inflation has not been repudiated,” said Krishna Guha, vice chairman of Evercore ISI.

“But the fact that this was kept in the background not the foreground [on Wednesday] both avoids opening the Fed up to political attack from the left, and confirms that Powell does not want to do anything that might prematurely foreclose on the possibility of a softish landing, even at the cost of leaving the Fed short of Volcker-esque maximum forcefulness on inflation at this time.”

Powell will be quizzed on Thursday by lawmakers in the House Financial Services Committee.

The recent talk of recession has brought the yield on the 10-year Treasury

down to 3.12% from as high as 3.48% earlier this month. Falling yields can help long-duration assets such as technology stocks and bitcoin
which rose in early action on Thursday.

U.S. data is set for release on weekly jobless claims and the June preliminary purchasing managers indexes from S&P Global.

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