This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ5R0AN_L.jpg
(Reuters) -Wall Street was set for lower open on Wednesday, pressured by a report the U.S. could curb sales of artificial intelligence (AI) chips to China, while investors awaited Federal Reserve Chair Jerome Powell’s speech for clues on the interest rate outlook.
Chipmakers Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) fell 3.5% and 3.2%, respectively, in premarket trading after the Wall Street Journal reported the Commerce Department could stop shipments of chips made by these companies to China as early as July.
Semiconductor stocks including Intel (NASDAQ:INTC), Marvell (NASDAQ:MRVL) Technology and Qualcomm (NASDAQ:QCOM) fell more than 1% each.
U.S. stock indexes snapped their losing streak on Tuesday as upbeat economic data eased fears of an imminent U.S. recession, though it boosted the odds of the Fed hiking interest rates again next month.
Investors are focused on a panel discussion of key central bank policymakers including Powell and European Central Bank President Christine Lagarde at the ECB annual forum in Sintra, Portugal. The session will begin at 9:30 a.m. ET (1330 GMT).
“Powell is going to say the same thing that they are data dependent and probably want to top interest rate policy by another 25 basis points at the next meeting and maintain his option when it comes to September,” said John Brady, senior vice president at R.J. O’Brien & Associates.
Traders have priced in a 76.9% chance that the Fed would hike interest rates by 25 basis points to 5.25%-5.50% in July and expect the central bank to hold rates through the end of 2023, according to CMEGroup’s Fedwatch tool.
The S&P 500 and Nasdaq hit more than one-year highs last week while the Dow scaled a six-month peak before hawkish comments from Powell sparked a selloff.
Still, an AI-inspired rally in technology and growth stocks as well as hopes that the Fed would soon end its rate-hike campaign have put the main indexes on course for quarterly gains.
Markets are awaiting the Personal Consumption Expenditures (PCE) index, the Fed’s favored inflation gauge, initial jobless claims data and the final reading of first-quarter GDP later this week to assess the state of the U.S. economy.
Investors will also keep an eye on bank stocks, with the Fed scheduled to release 2023 results of its annual stress test of large banks after markets close on Wednesday.
These results help determine how much capital banks need to be healthy and how much they can return to shareholders via stock buybacks and dividends.
At 8:15 a.m. ET, Dow e-minis were down 7 points, or 0.02%, S&P 500 e-minis were down 8.5 points, or 0.19%, and Nasdaq 100 e-minis were down 56.5 points, or 0.37%.
Boeing (NYSE:BA) rose 1.3% after the planemaker said about 90% of its China 737 max fleet had resumed commercial operation as of end-June.
General Mills (NYSE:GIS) slid 5.4% after the packaged food maker forecast full-year profit below analysts’ estimates.
