Minutes from the Fed’s September meeting showed lingering inflation concerns, potentially complicating the path to the aggressive interest-rate cuts markets have already priced in.
“Central bankers are still paying lip service to their inflation mandates,” said Kyle Rodda, senior financial market analyst at Capital.com.
Any hint of a hawkish tilt from Powell could weigh on equities, which have held strong even during a seasonally weak stretch, partly on expectations of lower rates.
“Investors who have held their nerve are cleaning up, yet the drums of worry are banging louder each day,” said Russ Mould, investment director at AJ Bell.
At 5.10am, Dow E-minis were down 7 points, or 0.01%, US S&P 500 E-minis dipped 3.25 points, or 0.05%, and Nasdaq 100 E-minis fell 21 points, or 0.08%.
The tech-heavy Nasdaq and the benchmark S&P 500 indexes hit all-time closing highs yesterday.
Markets will lean heavily on other Fed speakers as well, including vice chair for supervision Michelle Bowman, Board governor Michael Barr and San Francisco Fed president Mary Daly.
A quiet economic calendar will also put the spotlight on earnings from PepsiCo and Delta Air Lines, whose forecasts and executive commentary will be parsed for insights on consumer confidence.
These indicators are expected to be used as substitutes for official releases, which have been halted due to the government shutdown, now in its second week.
While their correlation with official data varies, some of these proxies have shown worrying trends.
Earlier this week, investment firm Carlyle estimated that US employers added just 17,000 jobs last month, far below the 54,000 economists polled by Reuters had expected in the nonfarm payrolls report.
Separately, spot gold prices held above US$4,000 an ounce, after breaching the milestone for the first time earlier this week.
Their gains have shown the strong demand for hedging even as investors chase momentum in equities.
Among stocks, Tesla was 1% lower in premarket trading, while Nvidia inched up 0.9%.
Roundhill Meme Stock ETF, which was re-launched yesterday after being shuttered for two years, surged 22.8%.
Costco Wholesale rose 1.4%, a day after reporting sales data for September.