Wall Street is getting lukewarm ahead of Powell’s speech

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© Reuters. The Fearless Girl statue can be seen outside of the NYSE in New York

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By Shashank Nayar and Medha Singh

(Reuters) – Wall Street major indices were set to a subdued open Thursday as the data showed a staggering rebound in the labor market as investors preceded remarks by Federal Reserve Chairman Jerome Powell on the recent surge in the US -Bond yields were cautious.

The number of Americans seeking unemployment benefits rose last week, likely due to brutal winter storms in the densely populated south, although job prospects are improving amid declining new COVID-19 cases.

The crucial monthly payroll report is expected on Friday.

Wall Street major indices fell for the second straight year on Wednesday as a surge in US bond yields put soaring technology stocks under pressure, while economy-linked financials, energy and industrials outperformed in hopes of a new round of tax aid and vaccinations.

“There is no question that sentiment is cautious as we are in a slight correction or pullback and most indices are trading below their 52-week high,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“It’s a mixture of pressure on returns from previous sessions and investors holding back from the Federal Reserve’s comments.”

Powell is expected to speak at 12:05 p.m. ET (1705 GMT) at a conference in the Wall Street Journal where his comments will be reviewed for signs of concern about the rise in bond yields last week on his final foray before the Fed political meeting from March 16th to 17th.

Prior to Powell’s remarks, 10-year government bond yields were 1.477% but were below last week’s one-year high of 1.614%.

Tech stocks are particularly sensitive to rising yields as their value depends heavily on future earnings, which are more heavily discounted as bond yields rise.

Microsoft Corp. (NASDAQ :), Apple Inc (NASDAQ 🙂 and Amazon.com Inc (NASDAQ 🙂 were flat to slightly lower in front of the bell.

At 8:40 a.m. ET, the Dow E-Minis were up 36 points or 0.12%, the E-Minis by 0.5 points or 0.01%, and the E-Minis by 4.25 points or 0.03% .

The S&P 500 is expected to open below its 50-day moving average, an indicator of the short-term momentum that has been shown to be support for the past few days. The Nasdaq could wipe out almost all gains since the start of the year.

The U.S. Senate is expected to begin debating President Joe Biden’s $ 1.9 trillion coronavirus relief package on Thursday after agreeing to compromise payments to higher-income Americans with moderate levels to hire democratic senators.

Boeing (NYSE 🙂 Co rose about 1% as the US and UK agreed a four-month suspension of US retaliatory tariffs in a long-running series of aircraft subsidies to allow negotiations.

Disney’s shares fell 1% as it announced it would close at least 60 Disney retail stores in North America and about 20% of its total worldwide this year as digital shopping platforms migrate to e-commerce.

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