US stock futures rise ahead of Powell’s second round of testimony

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US stock futures rise ahead of Powell’s second round of testimony

Investing.com– U.S. stock futures rose modestly on Wednesday, stabilizing after setting novel records ahead of further comments from Federal Reserve Chairman Jerome Powell.

As of 6:45 a.m. ET (10:45 GMT), the company’s shares were mostly unchanged, up 10 points, or 0.2%, and up 60 points, or 0.3%.

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Both hit novel highs Tuesday, although the pace of their gains appeared to sluggish significantly. The gains were also largely skewed toward tech-heavy stocks amid continued buzz around artificial intelligence.

Powell re-enters the scene

Federal Reserve Chairman Jerome Powell’s testimony showed markets largely maintaining their expectations for an interest rate cut in September, although Powell did not appear to announce one directly.

Speaking before the Senate Banking Committee, Powell acknowledged that the U.S. economy has slowed in recent months and that he is making progress toward meeting the Federal Reserve’s 2% inflation target.

Powell noted that cooling the labor market too much poses further risks to the economy and that keeping interest rates too high for too long could pose an even greater threat to the economy.

Still, the Fed chairman gave no direct hints about the timing of potential rate cuts and reiterated that any future decisions would continue to be contingent on upcoming economic data. He also reiterated the bank’s commitment to achieving a 2% inflation target.

Powell is scheduled to appear before the House of Representatives on Wednesday.

The Federal Reserve chairman’s comments kept investors betting on a rate cut in September, with the probability of a 25 basis point cut in the month standing at over 72%.

Powell’s comments also put particular emphasis on upcoming inflation data due on Thursday.

Microsoft to resign from Open AI board position – report

In the corporate sector, many of Wall Street’s largest banks are due to report on Friday, with data from PepsiCo (NASDAQ:) and Delta Air Lines (NYSE:) also due before the end of the week.

Additionally, Microsoft (NASDAQ:) is likely to find itself in the spotlight after the software giant reportedly plans to resign from its observer position on OpenAI’s board amid growing regulatory scrutiny of generative AI in Europe and the US.

Keith Dolliver, Microsoft’s deputy general counsel, wrote to OpenAI on Tuesday that while the observer position provides valuable insight into the board’s activities without compromising its independence, it is no longer necessary because Microsoft has “noted the significant progress made by the newly formed board.”

Oil falls after feeble data from China

Oil prices fell on Wednesday, extending losses from the previous session, as feeble inflation data from China raised concerns about the health of the world’s second-largest economy.

At 6:45 a.m. ET, U.S. WTI crude oil futures were down 0.1% to $81.36 a barrel, while Brent crude oil futures were down 0.1% to $84.55 a barrel.

Deflation fears in China, the world’s largest oil importer, weighed on crude markets on Wednesday, although a bigger-than-expected decline in U.S. inventories narrow losses.

Data from the , released Tuesday, showed U.S. crude inventories fell by 1.9 million barrels last week as the summer shipping season continued.

Both indexes are down about 3% over the past three sessions, a sign that the Texas energy industry has emerged from Hurricane Beryl relatively unscathed.

(Ambar Warrick contributed to this article.)

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