US Futures Point To Lackluster Start As Fed Official Kashkari's Hawkish Comments Aggravate Rate Hike Fears

U.S. index futures are flatlining on Wednesday following three straight sessions of clocking losses.

On Tuesday, the major averages closed lower as investors digested some weak Main Street data and an oil rally that took the commodity to near a 2-week high. The market opened slightly lower and cut its losses in early trading as weak housing and regional manufacturing data raised hopes of less aggressive rate hikes by the Federal Reserve.

The optimism gave way to fears as the session progressed, with the major averages moving listlessly toward a muted close.

The Dow Industrials underperformed, with a 0.47% pullback to 32,909.59, its lowest level since Aug. 9. The S&P 500 index shed 0.22% before closing at 4,128.73, also a two-week low, and the Nasdaq Composite index ended flat with a slight negative bias at 12,381.30.

At the time of going to press on Wednesday, the Dow, S&P and Nasdaq 100 futures were retreating 0.11%, 0.09%, and 0.14%, respectively. The Russell 2000 futures were down a steeper 0.48%.

Navellier Associates' Louis Navellier said, “the focus remains on the Fed discussion at the end of the week regarding its commitment to aggressive monetary tightening to rein in inflation.”

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Another housing market reading is due for the day, with the National Association of Realtors releasing its pending home sales index for July at 10 a.m. ET. The index, a leading indicator of the housing market, fell 8.6% in June.

The weekly mortgage application data from the Mortgage Bankers Association is also due at 7 a.m. ET. Application volume fell 2.3% week-over-week in the week ended Aug. 12.

Luxury homebuilder Toll Brothers, Inc. TOL late Tuesday lowered its full-year deliveries guidance after reporting quarterly sales that missed estimates.

LPL Financial chief economist Jeffrey Roach said in a recent report that “the declining rate of new home sales is driven by higher borrowing costs, elevated building costs, and a slowdown in real wages. New home sales in the northeast bucked the trend with a higher rate of sales in July.”

The U.S. Census Bureau will release its preliminary durable goods orders data for July. The report is due at 8:30 a.m. ET.

The market could also react to Minneapolis Federal Reserve President Neel Kashkari’s hawkish statement made after the close on Tuesday. The Fed official hinted at least two percentage points of hikes from the current 2.25%-2.50% by the end of the year as inflation rules high.

Nvidia Corporation NVDA, Salesforce, Inc. CRM, Autodesk, Inc. ADSK and Guess, Inc. GES are among the key companies reporting their financial results — all after market close.

The WTI crude oil new front-month contract was firmer and was approaching $95-a-barrel.

The major Asian markets ended Wednesday’s session mixed, with China, Hong Kong, and the Malaysian market seeing marked weakness. In Europe, the French CAC 40 Index and the German DAX Index were retreating for the fourth straight session and the U.K.’s FTSE 100 Index was down for a third session in running.

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY was down 0.10% to $411.93 and the Invesco QQQ Trust QQQ dropped 0.16% lower to $313.59, according to Benzinga Pro data.