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The three main U.S. stock indexes rallied on Friday and notched weekly gains as Treasury yields pulled back from their peaks after comments from Fed policymakers calmed jitters over aggressive rate hikes.
The yield on U.S. 10-year Treasury notes slipped to 3.93%, its lowest since March 1, while the two-year yield inched down to 4.84% after touching its highest since 2007 last week. [US/]
Powell will be testifying before Congress on Tuesday and Wednesday and investors will watch for clues on the policy outlook, after recent strong economic data and hot inflation numbers fueled bets for more interest rate hikes this year.
“Looking at the latest set of data, the U-turn of easing inflation and last month’s blowout jobs figures, we don’t expect to hear anything less than hawkish from Mr. Powell,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“But it’s always possible that a word like ‘disinflation’ slips out of his mouth, and that we get a boost on risk.”
Traders expect at least three 25-basis-point rate hikes this year and see rates peaking at 5.44% by September from 4.67% now.
At 05:29 a.m. ET, Dow e-minis were down 31 points, or 0.09%, S&P 500 e-minis were down 1.75 points, or 0.04%, while Nasdaq 100 e-minis were up 5.25 points, or 0.04%.
Shares of Apple Inc (NASDAQ:AAPL) climbed 1.0% in premarket trading after Goldman Sachs (NYSE:GS) initiated coverage on the iPhone maker with “buy” rating.
U.S.-listed shares of Chinese companies Alibaba (NYSE:BABA) and PDD Holdings slid 0.9% and 1.3%, respectively, as China set a modest target for economic growth this year of around 5%, below market expectations of 5.5%-plus growth.
