US open: Tech rout continues, Fed Powell, Tesla under the spotlight

US stocks point to a weaker start with the high growth tech sector set to be hardest hit. Jerome Powell’s testimony before Congress will be particularly in focus given rising inflation expectations. Tesla continues to slide.


US futures

Dow futures -0.03% at 31450

S&P futures -0.6% at 3851

Nasdaq futures -1.7% at 13000

In Europe

FTSE -0.1% at 6602

Dax -1.3% at 13792

Euro Stoxx -0.6% at 3674

Learn more about trading indices

Jerome Powell & rising inflation expectations

Federal Reserve Chair Jerome Powell begins a two day semi-annual testimony before Congress today. His appearance comes as concerns over future inflation expectations are on the rise.

The markets will be looking to Jerome Powell for indications as to whether the Fed is prepared to stick to the loose monetary policy in order to enable a quick recovery from the pandemic or whether fears of overheating will see the Fed start to consider a tighter stance.

Fed Powell is expected to provide assurance that this Fed will not respond to rising inflation expectations with an immediate rate hike. This could drag on demand for the US Dollar which is on the rise in the European session.

However, the Doves in the Fed could have an increasingly tough time talking down speculation of early tapering should the rising bond yield trend continue.

Learn more about the Federal Reserve

Stocks point lower tech rout continues

Tech stocks are by far the weakest link with the Nasdaq futures trading -1.5%, extending a 2.6% slide from the previous session. Rising yields and surging commodity prices are take the shine off these growth stocks which whose valuations are raising concerns in the current climate.

Home Depot

Home Depot trades -1.5% pre-market despite Q4 earnings beating expectations as the firm benefitted from a huge pandemic driven boom in home improvements. EPS $2.65 vs $2.62exp. on Revenue $32.26 billion vs $30.73 expected. However, failure to provide an outlook unnerved investors.


Tesla plunged -8% in the previous session and trades a further 5.5% lower pre-market hit by the sell off in tech stocks, the fall in bitcoin in which Tesla recently invested $1.5 billion. The stock trades -27% from its peak of $900 hit in January, putting it technically in a bear market.

A complete history of Tesla.

Tesla rival Lucid goes public

Luxury electric vehicle maker Lucid Motors agreed to go public by merging with Churchill Capital IV Corp in a deal which valued the combined company at $24 billion.

Lucid is run by an ex-Tesla engineer. Investors are rushing into the EV sector, boosted by Tesla’s meteoric rise and with emission regulations toughening in Europe.

Lucid is expected to start production  in North America in H2 with Lucid Air. It plans to deliver20,000 vehicles in 2022.

FX – USD holds 90.00

The US Dollar rebounded from an almost 6 week low in the Asian session and trades above the firm support of 90.00

GBP/USD holds above 1.4050 near its 35 month high after encouraging UK jobs data. Whilst the unemployment rate rose above 5% for the first time since the Brexit referendum in 2016, the claimant count fell by 20,000 and average wages rose by an above forecast 4.7%. PM Boris Johnson’s plan to reopen the UK economy in the coming months was also well received.

GBP/USD trades +0.05% at 1.4068

EUR/USD trades -0.1% at 1.2148

Oil rises on reopening optimism

Oil prices are on the rise supported by the easing of lockdowns, improving economic forecasts and a slow return to production in the US following the cold snap in Texas.

Goldman Sachs says they expect Brent to reach $70 in Q2 up from a previously predicted $60 and $75 in Q3, up from $65.

US crude trades +0.2% at $61.84

Brent trades +0.3% at $64.54

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

Fed Chair Powell’s testimony will be the main event.

Housing price index December.

15:00 UTC Consumer confidence Feb. is expected to move higher to 90.00, up from 89.3 in January.

API weekly crude oil stock inventories

More from Indices

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.