S&P 500, Dow set to drop ahead of Powell, Yellen testimonies

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By Medha Singh

© Reuters/BRENDAN MCDERMID People are seen on Wall St. outside the NYSE in New York

(Reuters) – U.S. stock index futures slid on Tuesday as energy stocks dropped while investors awaited remarks from Fed Chair Jerome Powell and Treasury Secretary Janet Yellen for clues on the pace of economic rebound.

Chevron Corp, Occidental Petroleum Corp and Exxon Mobil Corp shed between 1.5% and 3.5% premarket as oil prices slumped 3% on fears that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand.

Travel-related stocks including United Airlines Holdings, American Airlines, Royal Caribbean Cruises Ltd and Carnival Corp slipped between 1.6% and 3.9%.

Wall Street’s main indexes rallied on Monday as tech-focused stocks caught a bid after coming under pressure since last month as their valuations looked stretched amid a spike in bond yields.

Apple Inc, Facebook Inc and Microsoft Corp eased between 0.2% and 0.7% from the previous session’s jump.

Powell is expected to reiterate his confidence in the economy’s growth while cautioning the recovery is far from complete. Yellen is likely to paint an optimistic picture of the economy before the U.S. lawmakers later in the day. Their congressional hearings begin at 12 p.m. ET (1600 GMT).

“We kind of know where the Fed is at in terms of yields, inflation and accommodation. We will want to hear a lot more about what Yellen says on additional stimulus,” said Neil Wilson, chief market analyst for Markets.com.

At 6:35 a.m. ET, Dow E-minis were down 171 points, or 0.52%, S&P 500 E-minis were down 19.75 points, or 0.5% and Nasdaq 100 E-minis were down 43 points, or 0.33%.

Shares of videogame retailer GameStop Corp, which is transitioning itself into an ecommerce firm, dropped 0.6% ahead of its fourth-quarter results due after markets close. The stock has been at the center of a recent retail trading frenzy.

U.S.-listed shares of AstraZeneca Plc fell 2.5% after a U.S. health agency raised fresh doubt on the results of the drugmaker’s large-scale COVID-19 vaccine trials.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Maju Samuel)