Stocks futures point to a weak open as Powell heads to the Hill

Federal Open Market Committee

Dow futures sharply lower

U.S. stock futures fell sharply early Wednesday morning, implying stocks would open in the red territory ahead of Federal Reserve Chair Jerome Powell’s testimony later in the day.

As of 5:20 a.m. ET, futures tied to the blue-chip Dow plunged 437 points, or 1.43% to 30,088.

S&P 500 futures gave away 63.75 points, or 1.69% to 3,704 while the tech-focused Nasdaq 100 futures lost 220.25 points, or 1.9% to 11,357.

On Tuesday, the Dow Jones Industrial Average rallied 641.47 points, or 2.2% to close at 30,530.25. The S&P 500 rose 89.95 points, or 2.5% to finish at 3,764.79 while the Nasdaq Composite added 270.95 points, or 2.5% to end at 11,069.30.

Eyes on Powell’s testimony

Powell will begin his two-day testimony before the House and Senate committees, where he is expected give his views on the state of the U.S. economy, and how the central bank plans to achieve its goal of maximum employment and price stability.

Powell will appear before the Senate Committee on Banking, Housing, and Urban Affairs at 9:30 a.m. ET today. He will then face the House Financial Services Committee on Thursday.

His testimony comes just days after the Fed increased interest rates by 75 basis points, the biggest rate hike since 1994. Economists widely expect the central bank to announce a similar hike at its next policy meeting in July.

Lawmakers are likely to grill Powell on why he and his fellow policymakers misjudged inflation as “transitionary” and why they now believe there will be costs to fighting it.

Crude futures slide as Biden mulls gas tax holiday

In energy markets, crude futures edged lower on Wednesday as the Biden administration pushed for a gas tax holiday to ease the pain of record-high gas prices.

According to a new report from the New York Times, Biden will today call on Congress to temporarily pause the federal gas tax, in a bid to dampen the rocketing fuel prices that have left many Americans frustrated.

The NYT report said the President plans to ask lawmakers to suspend the federal taxes (about 24 cents per gallon of diesel and 18 cents per gallon of gasoline) through the end of September, just ahead the midterm elections.

As of 5:20 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were down $5.08, or 4.64% to $104.44 a barrel.

Global Brent crude futures were indicated $4.68, or 4.08% lower to $109.97 a barrel.