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Tesla slips as U.S. regulator opens probe into Model Y cars
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Occidental rises as Buffett's Berkshire boosts stake to 22.2%
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WeWork rises on report of talks to restructure $3 bln in debt
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Futures up: Dow 0.10%, S&P 0.11%, Nasdaq 0.16%
(Updates details, prices)
By Sruthi Shankar and Bansari Mayur Kamdar
March 8 (Reuters) - Wall Street was set for a subdued
open on Wednesday as investors worried about a potential
recession after comments from Federal Reserve Chair Jerome
Powell a day earlier fueled bets of aggressive monetary policy
tightening.
Ahead of the crucial non-farm payrolls report on Friday,
data showed U.S. private payrolls increased more than expected
in February, pointing to continued labor market strength.
Powell told U.S. lawmakers on Tuesday the Fed would likely
need to raise interest rates more than expected as it seeks to
tame inflation, sending key U.S. stock indexes down more than
1%, with the benchmark S&P 500 logging its biggest
percentage decline in two weeks.
Traders sharply increased their bets that the U.S. central
bank will raise rates by 50 basis points later this month, with
money market futures pricing in a 70% chance of such a move. BlackRock's chief investment officer of global fixed income,
Rick Rieder, said the Fed could raise rates to 6% and keep them
there for an extended period of time to fight inflation. Traders
currently see the Fed funds rate peaking at 5.66% by September.
Powell will testify again before the House Financial
Services Committee at 10:00 a.m. ET.
A closely watched part of the U.S. Treasury yield curve saw
its deepest inversion in more than 40 years on Tuesday. Such an
inversion is seen as a reliable recession indicator. "The yield on the two year is really showing you that the
Treasury curve is taking the Fed seriously about where interest
rates are heading, whereas the 10-year is really trying to get
behind that hard landing narrative," said Art Hogan, chief
market strategist at B Riley Wealth.
"Unless we get some data over the course of the next two
weeks, we really don't know which way we should be landing.
Unfortunately the most important piece of the data doesn't come
until Friday, that's why we've got a market that's meandering a
bit."
Labor Department data at 10:00 a.m. ET is likely to show U.S.
job openings increased to 10.5 million in January after an
unexpected rise to 11 million in the previous month.
At 8:42 a.m. ET, Dow e-minis were up 33 points, or
0.1%, S&P 500 e-minis were up 4.25 points, or 0.11%, and
Nasdaq 100 e-minis were up 19.75 points, or 0.16%.
Tesla Inc slipped 1.1% in premarket trading after
U.S. auto safety regulator said it was opening a preliminary
investigation into 120,000 Model Y 2023 vehicles following
reports about steering wheels falling off while driving.
Occidental Petroleum Corp gained 2.8% after Warren
Buffett's Berkshire Hathaway Inc increased its stake in
the oil company to about 22.2%.
WeWork Inc climbed 7.1% after the New York Times
reported the flexible workspace provider was in talks to
restructure its outstanding debt of more than $3 billion and
raise more cash.
(Reporting by Sruthi Shankar and Bansari Mayur Kamdar in
Bengaluru, additional reporting by Amruta Khandekar
Editing by Vinay Dwivedi)
