Stock futures are stable while investors juggle the Fed’s comments and policies

Trading on the floor of the NYSE, March 17, 2022.

Brendan McDermid | Reuters

U.S. stock futures were slightly changed in overnight trading Tuesday as investors continue to digest Federal Reserve revelations about inflation and interest rates.

Dow futures fell just 11 points. The S&P 500 futures fell 0.03% and the Nasdaq 100 futures fell 0.05%.

On Tuesday, the major averages rose as investors rated the latest comments from Federal Reserve chief Jerome Powell. Last week, the Fed raised interest rates for the first time since 2018 and predicted a plan to raise interest rates by a quarter of a point at each of the remaining six meetings in 2022.

But then Powell appeared to increase rhetoric even more on Monday as he vowed to take tough steps against inflation.

“The labor market is very strong and inflation is far too high,” the central bank governor told the National Economic Association. “If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at one or more meetings, we will do so.”

The Dow Jones Industrial Average rose more than 250 points on Tuesday, helped by a 2.2% jump in Nike’s stock from strong earnings. The S&P 500 rose 1.1 percent.

The Nasdaq Composite was the relative outperformer, rising 2% as Meta Platforms, Amazon, Apple, Netflix and the Google Mother Alphabet closed higher.

The 10-year benchmark yield on US government bonds hit 2.39% at the top of the session on Tuesday, the highest level since May 2019.

“Investor attitudes are strengthened by the fact that the stock market seems a little worried about bond yields rising or a Federal Reserve becoming more hawkish day by day,” said Jim Paulsen, chief investment strategist for Leuthold Group.

The S&P 500 is only 5% off its record and has surpassed both its 50-day and 200-day moving averages.

Still, famed activist investor Carl Icahn said Tuesday that an economic downturn could come.

“I think there could very well be a recession or even worse,” Icahn, founder and chairman of Icahn Enterprises, told Scott Wapner on CNBC’s “Closing Bell Overtime.”

On the economic front, new home sales data from February will be released at. 10 Wednesday.

Generals Mills, Cintas and Tencent Holdings will report quarterly earnings before Wednesday. KB Home reports after the clock.

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