Traders on the floor of the New York Stock Exchange (NYSE) in New York, on Tuesday, January 3, 2023.
Michael Nagle | Bloomberg | Getty Images
Stock futures were lower on Wednesday, putting Wall Street on track to build on losses from the previous session.
Futures tied to the Dow Jones Industrial Average fell 172 points, or 0.5%. S&P 500 futures and Nasdaq 100 futures fell 0.5% and 0.6%, respectively.
Wall Street snapped a losing streak as the yield on the 10-year Treasury note rose back above 4% after Federal Reserve Governor Christopher Waller warned that monetary easing could be slower than expected.
On Wednesday, European Central Bank President Christine Lagarde said she expected the ECB to cut interest rates later this year, but reiterated a data-dependent monetary policy approach.
According to CME Group's FedWatch tool, traders so far expect there to be about a 65% chance that the Federal Reserve will begin cutting interest rates in March as hopes of a turnaround grow.
Traders also weighed China's weaker-than-expected GDP data released overnight.
Fourth-quarter results are gaining momentum this week and could serve as the next big test for the market that could set the course for 2024. Investors have already pored over the results of major banks including Goldman Sachs, Morgan Stanley and Bank of America. Earnings season begins on Wednesday with results from Charles Schwab, US Bancorp and Prologis.
“This period may lack the head-turning 'earnings recession' headlines we got last quarter, but they gain importance because they set the tone for 2024,” said Jeffrey Buchbinder, chief equity strategist at LPL Financial. “After 2023 was a year in which rising valuations delivered strong gains, earnings are likely to bear the brunt this year.”
Wall Street awaits December retail sales, due out on Wednesday. The results could provide further insight into consumer health or add to growth concerns if spending slows. Economists surveyed by Dow Jones expect retail sales to rise 0.4% in December, up slightly from 0.3% in November.
Also scheduled for Wednesday are the release of the Federal Reserve's beige book and business inventories for November, along with remarks from New York Federal Reserve Bank President and CEO John Williams.