USA stock index futures were lower on Friday after a week of choppy trading as the corporate earnings season winds down and investors again focus on the timing of the Federal Reserve’s next interest rate hike. Those comments followed New York Fed President William Dudley who lauded recent strong gains in USA employment after saying earlier in the week that the Fed could raise rates as soon as next month.
Advertisement
San Francisco Fed President John Williams also signaled support for a rate hike in the near future in a Thursday afternoon speech.
“My inbox is full today of people returning to the Williams statements, which were basically a 180-degree turn from his paper earlier in the week”, said Jim Vogel, head of interest-rate strategy at FTN Financial in Memphis, Tennessee.
Investors also are bracing for next week’s meeting of global central bankers in Jackson Hole, Wyoming where Federal Reserve Chair Janet Yellen may provide more insight on the rate outlook.
The greenback remained below the ¥100-threshold in the early morning, due partly to an overnight fall in US long-term interest rates, traders said.
At 3:26 p.m. ET, the Dow Jones industrial average was down 33.58 points, or 0.18 per cent, to 18,564.12, the S&P 500 had lost 2.35 points, or 0.11 per cent, to 2,184.67 and the Nasdaq Composite had dropped 0.65 points, or 0.01 per cent, to 5,239.49.
“There is a bit on uncertainty over the Fed’s decision and Yellen’s speech next week is motivating investors to take some money off the table”, said Peter Cardillo, chief market economist at First Standard Financial in NY.
The S&P utility index, which tends to fall as propects for a rate increase rise, was down 1.3 per cent. Trading volumes were thin amid a summer lull in the United States and Europe.
A gauge of stock markets around the world.MIWD00000PUS fell 0.4 percent. Thursday’s session was the quietest across Europe’s stock exchanges in almost three months, according to Thomson Reuters data. Oil prices were split, with West Texas Intermediate up about 0.3% late in the session while Brent, the worldwide standard, slipped 0.5%. The dollar index.DXY rose 0.35 percent to 94.480, moving away from eight-week lows touched on Thursday. Those bearish the dollar took the comments to mean the Fed is likely to remain cautious and that interest rate hikes are going to be slow.
Advertisement
Still, traders in fed funds futures are pricing in only an 18% chance of a rate hike at the Fed’s September 21 meeting. The 10-year Treasury note rose almost 5 basis points to 1.58%.
