By Peter Nurse
Investing.com -- U.S. stocks are seen opening with marginally higher Wednesday, rebounding after the previous session’s sharp losses ahead of the second round of Fed head Jerome Powell’s testimony on Capitol Hill.
At 07:00 ET (12:00 GMT), the Dow futures contract was up 20 points, or 0.1%, S&P 500 futures traded 5 points, or 0.2% higher, and Nasdaq 100 futures climbed 25 points, or 0.3%.
The main equity indices closed sharply lower Tuesday, with the blue-chip Dow Jones Industrial Average dropping almost 600 points, or 1.7%, while the broad-based S&P 500 fell 1.5%, and the tech-heavy Nasdaq Composite lost 1.3%.
These losses were accompanied by a leap in U.S. bond yields, with the yield on the 2-year Treasury jumping past 5%, climbing to its highest level since 2007.
Powell speaks later Wednesday in front of the House Financial Services Committee, the second day of his semiannual testimony to Congress.
Investors will be looking to see whether he adds to his Tuesday’s comments indicating that interest rates may head higher than previously anticipated if economic data warrants such a move.
Ahead of this, there is more economic data to study, in the form of the February ADP nonfarm employment change and the JOLTS job openings for January.
These will provide clues about the health of the U.S. labor market ahead of Friday’s official jobs report, which is expected to show the economy added 200,000 jobs last month, a drop from the impressive 517,000 jobs created the prior month.
The Fed also releases its Beige Book, which will also provide clues on the strength of the labor market and manufacturing activity.
In corporate news, quarterly earnings are expected from the likes of food giant Campbell Soup (NYSE:CPB) and spirits and wine producer Brown Forman (NYSE:BFb).
Additionally, Occidental Petroleum (NYSE:OXY) stock rose premarket after a regulatory filing showed that Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) has added to its stake in the oil company.
Palantir Technologies (NYSE:PLTR) stock also gained after the data analytics firm won a contract to sell up to $99.6 million worth of software to the U.S. Department of State for monitoring the health of the diplomatic corps.
Oil prices traded in narrow ranges Wednesday, with the negative sentiment after Powell's comments mitigated by a surprise reduction in U.S. oil stocks of about 3.8 million barrels in the week ended March 3, according to data from industry body American Petroleum Institute.
If confirmed by the official data later Wednesday this would be the first decline after 10 straight weeks of builds, and would suggest a tightening of supplies in this important market.
By 07:00 ET, U.S. crude futures traded 0.2% lower at $77.45 a barrel, while the Brent contract rose 0.1% to $83.34. Both benchmarks fell over 3% last session as investors braced for steeper U.S. rate hikes.
Additionally, gold futures traded largely flat at $1,820.25/oz, while EUR/USD traded 0.1% lower at 1.0538.