Wall St set for subdued open as investors await Fed rate hike clues

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 22, 2022. REUTERS/Brendan McDermid/File Photo

By Bansari Mayur Kamdar and Devik Jain

(Reuters) -Wall Street was on track for a muted open on Wednesday as recent economic data fueled fears of a slowdown ahead of the U.S. Federal Reserve's annual conference this week.

U.S. Treasury bond yields extended gains after hitting multi-week highs in the previous session, weighing on high-growth and technology stocks in trading before the bell.

Big banks were mixed in choppy trading after falling for five straight sessions.

"Traders are reluctant to raise their exposure, afraid of getting run over by a more forceful Fed," said Marios Hadjikyriacos, senior investment analyst at XM.

Wall Street indexes posted losses in the past three sessions after a summer rally was halted by growing concerns of a hawkish stance by the Fed, an energy crisis in Europe and signs of economic slowdown in China.

Investor focus will be on the Jackson Hole symposium which begins on Thursday and remarks from Fed Chair Jerome Powell the day after for clues on whether the central bank can achieve a "soft landing".

"Some anticipation over how hawkish Powell could be on Friday has added to some of the lingering concerns that we've seen recently," said Ryan Detrick, chief market strategist at Carson Group.

Traders are split between expecting a 50-basis point hike and a 75-basis point hike by the central bank. [FEDWATCH]

Markets had bounced back from bear market lows on better-than-expected results from corporate America and data suggesting that inflation may have peaked, but fears of an aggressive Fed snapped the summer rally last week.

The S&P 500 has recovered 13% from its mid-June lows. The benchmark index will end the year a little above its current level, according to a Reuters poll.

Meanwhile, surveys on Tuesday showed the global economy is increasingly at risk of sliding into recession as consumers faced with generation-high inflation rein in spending, while central banks are tightening policy aggressively.

U.S. private-sector business activity contracted for a second straight month in August to its weakest in 27 months, with particular softness in the services sector as demand weakened.

At 08:51 a.m. ET, Dow e-minis were down 23 points, or 0.07%, S&P 500 e-minis were up 0.75 points, or 0.02%, and Nasdaq 100 e-minis were flat.

Nordstrom Inc (NYSE:JWN) tumbled 12.8% after the retailer cut its annual revenue and profit forecasts, a sign that inflation was squeezing consumer spending on its high-end clothing and footwear.

Intuit Inc (NASDAQ:INTU) gained 5.6% after the accounting software maker forecast upbeat fiscal 2023 revenue.

Oil majors Exxon Mobil Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX) rose 0.4% each, tracking crude prices, after Saudi Arabia suggested this week that OPEC could consider cutting output.

Chipmaker Nvidia (NASDAQ:NVDA) Inc was flat ahead of quarterly results after the bell.