Market Snapshot: Stock futures edge lower ahead of Powell remarks

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Stock-index futures pointed to a slightly lower start for Wall Street Wednesday as investors await congressional testimony by Federal Reserve Chairman Jerome Powell and gauged prospects for a U.S.-China trade deal a day after President Donald Trump offered no hints on the timing of an eagerly anticipated “phase one” pact.

How are major indexes trading?

Futures on the Dow Jones Industrial Average YMZ19, -0.33%  fell 122 points, or 0.4%, to 27,541, while S&P 500 futures ESZ19, -0.32%  declined 13.15 points, or 0.4%, to 3,078.75. Nasdaq-100 futures NQZ19, -0.40%  were off 43.75 points, or 0.5%, to 8,231.25.

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Bulls and bears fought to a standstill Tuesday as far as the Dow DJIA, +0.00%  was concerned, with the blue-chip gauge ending unchanged at 27,691.49. The S&P 500 SPX, +0.16%  rose 4.83 points, or 0.2%, to end at 3,091.84, while the Nasdaq Composite COMP, +0.26%  rose 21.81 points to end at 8,486.09, up 0.3%. The finish marked a record close for the Nasdaq, while the Dow and S&P 500 remain near their highs.

What’s driving the market?

In a Wednesday speech at the Economic Club of New York, Trump said a “significant phase one” deal could happen soon, but only if the deal worked to the advantage of U.S. workers and businesses. News reports also indicated Trump might put off a decision, due Wednesday, on whether to impose tariffs up to 25% on European auto imports.

The Wall Street Journal late Wednesday reported that tariffs were emerging as the main stumbling block to efforts by the U.S. and China to reach a limited trade deal. Specifically, the hurdle surrounds whether the U.S. has agreed to remove existing tariffs as part of a partial phase one deal or whether the U.S. would only cancel tariffs that are set to take effect on Dec. 15, the report said.

“Investors still seem to think this is mostly theatrics judging by the muted market reaction so far, but there’s no denying that even a partial deal is no longer ‘a sure thing,’” said Marios Hadjikyriacos, investment analyst at XM, in a note.

“Overall, the calm in the trade war and the broader risk-on sentiment of recent weeks may be more fragile than they appear, and with markets having gone on a euphoria rally lately, it might not take much bad news to trigger a notable correction,” he said.

Powell is set to testify before lawmakers twice this week, with his first appearance coming at 11 a.m. Eastern before the Joint Economic Committee. Analysts expect few fireworks from Powell.

“We expect him to reiterate that monetary policy is ‘in a good place,’ hence suggesting that the Fed is on hold for now,” wrote analysts at UniCredit, in a note.

Meanwhile, investors may also pay attention to House impeachment hearings set to get under way at 10 a.m. Eastern.

The economic calendar, meanwhile, features the October reading of the consumer-price index at 8:30 a.m. Eastern. Economists surveyed by MarketWatch forecast a 0.3% rise, with the core reading expected to increase 0.2%.

Stocks to Watch

Earnings reports are expected Wednesday from Cisco CSCO, +0.56%  , Canada Goose GOOS, -0.28%  , Luckin Coffee LK, +1.17%  , and NetApp NTAP, +0.45%  

Nike NKE, -0.61%  will stop selling sneakers and apparel directly on AMZN, +0.36%  the sportswear giant said.

Google’s GOOGL, -0.08%  project to collect data on millions of patients without their knowledge is drawing scrutiny from federal regulators, the Wall Street Journal reported.

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