Wall Street futures fell on Wednesday after a broad-based rally in the previous session, with investor focus squarely on Federal Reserve Chair Jerome Powell's congressional testimony to gauge the pace of future interest rate hikes.
U.S. stock indexes have been whipsawed in recent sessions as investors debate whether the market has hit a bottom in the wake of a sharp selloff on concerns that aggressive policy moves by central banks could trigger a global economic slowdown.
Megacap technology and growth stocks Apple, Microsoft, Alphabet, Amazon, Meta Platforms, Netflix, Tesla and Nvidia fell between 1% and 2.3% in premarket trading.
Oil prices skid more than 4% as U.S. President Joe Biden pushed to cut taxes on fuel to reduce costs for drivers amid aggravated relations between the White House and the U.S. oil industry.
Market Snapshot
At 07:50 a.m. ET, Dow e-minis were down 361 points, or 1.18%, S&P 500 e-minis were down 51 points, or 1.35%, and Nasdaq 100 e-minis were down 173.25 points, or 1.5%.
Pre-Market Movers
Winnebago (WGO) – The recreational vehicle maker saw its stock jump 3.9% after it beat top and bottom-line estimates for its latest quarter. Winnebago earned an adjusted $4.13 per share, compared with a consensus estimate of $2.96, helped by higher prices and a jump in its gross profit margins.
La-Z-Boy (LZB) – La-Z-Boy rallied 9.3% in premarket trading after posting better-than-expected quarterly results that included record sales for the furniture maker. The company also said it is focusing efforts to reduce its backlog and shorten lead times.
Revlon (REV) – Revlon shares surged 30% in premarket trading, continuing a rally that began after the cosmetics maker filed for Chapter 11 bankruptcy protection last week. Revlon soared 91% Friday and jumped another 62% yesterday.
Korn Ferry (KFY) – The consulting firm reported an adjusted quarterly profit of $1.75 per share, beating consensus estimates by 20 cents, with revenue also topping Wall Street forecasts. Results were boosted by a 30% jump in fee revenue compared with a year earlier. Korn Ferry also announced a 25% dividend increase, and its stock rallied 3.1% in premarket trading.
Airbnb (ABNB) – Airbnb fell 3% in the premarket after JMP Securities downgraded it to “market perform” from “market outperform,” saying that the post-pandemic jump in travel demand is already reflected in Airbnb’s valuation.
Dow Inc. (DOW) – The chemical maker’s shares fell 4.4% in premarket action after Credit Suisse downgraded the stock to “underperform” from “neutral.” Credit Suisse said several pandemic-related factors that boosted Dow and its peers could be in the process of reversing.
PulteGroup (PHM) – PulteGroup slid 2.3% in premarket trading after RBC Capital Markets downgraded the home builder’s stock to “sector perform” from “outperform.” RBC also cut earnings estimates on the expectation that the housing market will further deteriorate as mortgage rates continue to rise.
Equity Residential (EQR) – Equity Residential was upgraded to “outperform” from “sector perform” at RBC Capital Markets. RBC feels the residential property REIT will benefit from its focus on affluent renters.
New Relic (NEWR) – The data analysis platform company’s stock jumped 1.4% in the premarket after Jana Partners disclosed a 5.4% stake. In an SEC filing, Jana said it believes the stock is undervalued and represents an attractive investment opportunity.
Market News
Biden Will Ask Congress on Wednesday to Pause Gas Tax Amid Record Pump Prices
U.S. President Joe Biden on Wednesday will call on Congress to pass a three-month suspension of the federal gasoline tax to help combat record pump prices, according to a senior administration official.
The Fed’s Powell Goes to Capitol Hill Today
Powell will deliver the central bank’s semiannual monetary-policy report to the Senate Banking Committee on Wednesday, one week after the Fed initiated the biggest interest-rate increase in about three decades. Expect legislators to focus on the trajectory of inflation and the odds of a recession, and demand more clarity on the Fed’s long-range projections.
IEA Chief Warns Europe to Prepare for Total Shutdown of Russian Gas Exports
International Energy Agency (IEA) chief Fatih Birol issued a warning to Europe, urging governments to remain prepared over a total shutdown of Russian gas exports this winter, the Financial Times (FT) reports.
Deutsche Bank CEO, Citi See 50% Recession Chance as Rates Rise
“At least I would say we have 50% likelihood of a recession globally,” the Deutsche Bank CEO said in an interview. In the US and Europe, “the likelihood of a recession coming in the second half of 2023, while at the same time the interest rates go up, is obviously up versus the forecasts we had before the war broke out” in Ukraine. His comments came on the same day that analysts at Citigroup Inc. made a similar prediction, citing supply shocks and higher interest rates.