Dow Jones futures turned negative on Wednesday, pointing to a second day of declines on Wall Street.
All eyes are on Federal Reserve chairman Jerome Powell as he prepares a 2.30am ET policy speech.
Investors are pricing more dovish commitments from the Fed, but what if they start rolling back instead? Risk assets could sell off.
Traders slammed the brakes on yesterday to snap a six-day winning streak, and the stock market trickled lower again this morning. Dow Jones Industrial Average (DJIA) futures point to a 46 point slide at the open.
All eyes are on the Federal Reserve policy statement this afternoon. Investors fully expect chairman Jerome Powell to keep the money cannons firing. But, what if he shocks the market and backs off?
According to strategist Patrik Schowitz at JPMorgan, it’s one of their biggest concerns right now:
One of the near-term risks to the market is that we can get a mini taper-tantrum where the Fed rolls back… That certainly wouldn’t be appreciated by equities or risk assets in general.
If Powell came out and surprised everyone today with a hawkish tone, there’s no doubt we see a sell-off in stocks.
Dow futures turn negative ahead of Powell statement
After spending most of the overnight session in the green, Dow futures turned negative on Wednesday morning, falling 46 points (0.17%). The move down comes after a delirious six-day winning streak that saw stocks extend into near-euphoric territory.