Investing.com - Wall Street futures pointed to a lower open on Tuesday, as market participants await a speech from Federal Reserve (Fed) chief Janet Yellen to gauge the possible timing of future rate hikes from the U.S. central bank.
The blue-chip Dow futures dropped 43 points, or 0.25%, by 11:02AM GMT, or 7:02AM ET, the S&P 500 futures traded down 5 points, or 0.25%, while the tech-heavy Nasdaq 100 futures lost 8 points, or 0.17%.
Since the surprisingly dovish stance taken by the U.S. central bank at the last meeting on March 16 where they cut forecasts for the number of rate hikes in half to just two this year, a string of Fed members have raised their voice, suggesting a more hawkish stance on monetary policy.
In this light, investors will pay close attention to Yellen who will give a speech to the Economic Club of New York at 15:30GMT, or 11:30AM ET, in the hopes that the Fed chair can explain the apparent divide between Fed hawks and doves.
Apart from Kansas City Fed president Esther George who dissented on the last decision due to her belief that the central bank should raise rates, Philadelphia Fed President Patrick Harker recently stated that the central bank should consider another interest rate hike as early as next month and added that he would prefer at least three hikes before year-end.
Both San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart also indicated that a rate hike could come as early as next month.
Most experts expect Yellen to re-emphasize on Tuesday her previous insistence that all meetings were “live”, meaning that rate decisions could happen at any point in time, though markets place low odds on any action happening in April.
Meanwhile, and despite Monday’s dismal downward revision to January’s personal spending that caused the Atlanta Fed to slash U.S. first quarter GDP growth forecasts to 0.6%, from the prior 1.4%, SF Fed chief Williams said earlier on Tuesday that his outlook on the U.S. economy was positive and reiterated that rate hikes would be “gradual and thoughtful”.
After Yellen’s speech, New York Fed chief William Dudley and Dallas Fed president Robert Kaplan will speak at 16:00GMT, or 12:00ET, and 17:00GMT, or 13:00ET, respectively.
Apart from the Fed, the economic calendar will see the release of the S&P/Case-Shiller house price index for January at speak at 13:00GMT, or 9:00AM ET, along with the Conference Board’s consumer confidence for March at 14:00GMT, or 10:00AM ET.
Additionally, oil prices fell on Tuesday among fears that the rebound from February’s low has run its course with Barclays (LON:BARC) analysts suggesting that the barrel of crude could return to near $30.
Concerns were also raised while waiting for inventory data which could show that U.S. stockpiles rose once again to record highs.
The American Petroleum Institute will release its weekly inventory data on Tuesday at 20:35GMT, or 16:35ET, while the U.S. Department of Energy's Energy Information Administration will publish its report on Wednesday at 14:30GMT, or 10:30AM ET.
U.S. crude futures fell 2.01% to $38.60 by 11:04AM GMT, or 7:04AM ET, while Brent oil lost 2.35% to $39.91.
In company news, after rumors that Microsoft (NASDAQ:MSFT) could be organizing investors in a takeover bid for the troubled Internet portal, Yahoo! Inc (NASDAQ:YHOO) reportedly set an April 11 deadline to submit preliminary bids for its web business and Asian assets, according to sources cited by the The Wall Street Journal.