Wall Street looked set for another day of losses Monday as fears the Federal Reserve will soon raise interest rates continued to spook investors out of assets considered risky, such as equities.
Traders were waiting for a speech by Fed dove Lael Brainard later in the day, hoping she could dispel concerns a rate increase is imminent.
Stock futures were off their worst levels but still firmly lower. The Dow Jones Industrial Average futures slid 67 points, or 0.4%, to 17,900, while those for the S&P 500 index dropped 7.25 points, or 0.3%, to 2,108.50. Futures for the Nasdaq-100 index lost 20.75 points, or 0.4%, to 4,646.50.
Fed jitters: The sharp declines follow a brutal session on Wall Street on Friday , when the Dow industrials lost almost 400 points and the S&P 500 index dropped 2.5% after hawkish Fed comments. Boston Fed President Eric Rosengren said a "reasonable case can be made" for raising interest rates, fueling expectations it will definitely happen this year. Both the Dow and the S&P plunged below their 50-day moving averages during Friday's rout.
"Should we continue to get a consistent hawkish message from policy makers ahead of the [Fed's] blackout period, we could see the implied probability of a hike in September ramp up considerably which based on the moves since Friday, would be bad news for equity markets," said Craig Erlam,
"The catalyst for this could once again come from Fed policy makers, with Lael Brainard, Neel Kashkari and Dennis Lockhart all scheduled to speak [today]," he added.
Investors are particularly waiting for Brainard's speech, hoping she--as the Fed's resident dove--will ease market fears that a rate increase is imminent.
"Further hawkish commentary and any indication that a rate hike is likely could trigger another wave of repricing for September and December, which in turn could see the dollar and Treasury yields on the rise again and equities coming under pressure," Erlam said.