Powell to testify, Bitcoin volatility - what's moving markets

Investing.com -- U.S. stock futures inch higher as markets gear up for Fed Chair Jerome Powell's much-anticipated testimony to lawmakers on Capitol Hill. Bitcoin pares back losses after the world's most popular cryptocurrency touches a new all-time high. A rematch of the 2020 U.S. presidential election seems ever more likely after President Joe Biden and Donald Trump secure major victories in Super Tuesday primary voting.

1. Futures inch higher

U.S. stock futures were subdued on Wednesday, as investors awaited the first of two days of key testimony from Federal Reserve Chair Jerome Powell and a fresh batch of economic data.

By 03:25 ET (08:25 GMT), S&P 500 futures had inched higher by 12 points or 0.2%, Nasdaq 100 futures had gained 90 points or 0.5%, and Dow futures had added 51 points or 0.1%.

The main averages closed in the red on Tuesday, dragged down by a drop in Apple shares (NASDAQ:AAPL) after a research report found that sales of the tech giant's flagship iPhone device plunged by 24% in the first six weeks of 2024. Chip stocks were also under pressure following a Bloomberg News report that U.S. officials had placed a hurdle in front of Advanced Micro Devices's (NASDAQ:AMD) plans to sell a processor designed for the Chinese market.

Strategists also argued that there was some profit-taking in the wake of a recent rally on Wall Street. At the closing bell, the benchmark S&P 500 had shed 1.0%, the tech-heavy Nasdaq Composite had lost 1.7%, and the blue-chip Dow Jones Industrial Average had dipped by 1.0%.

2. Fed's Powell to testify

Jerome Powell is widely expected to maintain a hawkish tilt during what will likely be closely-watched testimony to lawmakers on Wednesday and Thursday.

The Fed Chair's grilling on Capitol Hill comes after several central bank officials have stated that they are in no rush to cut interest rates down from more than two-decade highs due to sticky inflation. Price growth in the U.S. has slowed markedly since 2022, but remains above the Fed's stated 2% target.

Recent data has also pointed to relative resilience in the U.S. economy, giving the Fed more headroom to keep rates higher for longer. New labor market figures, including job openings numbers later today and the February nonfarm payrolls report on Friday, are set to provide more cues on that front.

After beginning 2024 with hopes that the Fed would reduce rates early in the year, markets are now widely predicting that policymakers will not roll out a 25 basis-point cut until June.

3. Bitcoin pares back losses

Bitcoin had erased much of its losses in early European trade on Wednesday, staying within sight of a record high as steady capital flows into U.S. spot exchange-traded funds and anticipation of a “halving” event kept buyers in play.

The world’s largest cryptocurrency was trading up 1.5% at $67,229.5 by 03:26 ET, after hitting a record high of $69,063 on Tuesday, according to Investing.com data. The token fell almost immediately after touching the peak, sinking as low as $59,000 before paring its losses.

Consistent capital flows into spot ETFs tracking the price of Bitcoin have recently bolstered the digital asset. Investors are also eyeing the approaching "halving" event, which will see the rate of generation of new Bitcoin slashed in half, limiting fresh supply.

Elsewhere, gold prices also moved lower after rising to record highs, in a sign that traders may be looking for a safe haven as the risk of a stock market correction grows.

Spot gold had fallen 0.1% to $2,126.88 an ounce, while gold futures expiring in April had dipped 0.3% to $2,134.75 an ounce by 03:28 ET. Spot gold hit an all-time high of $2,142.15 an ounce, while gold futures reached a peak of $2,150.50 an ounce on Tuesday.

4. Biden, Trump dominate Super Tuesday voting

U.S. President Joe Biden and his predecessor Donald Trump both secured victories in a swathe of states holding party primaries on Super Tuesday, all but assuring a rematch in this year's White House race.

Trump in particular notched wins in the delegate-rich states of California and Texas, placing pressure on Nikki Haley, his biggest challenger for the Republican nomination, to drop her bid. Haley won in just one state, Vermont, according to the Associated Press.

Biden, meanwhile, only lost in the Democratic caucus of American Samoa, a small U.S. territory in the South Pacific.

Although the results made a re-run of the 2020 presidential campaign a near certainty, many voters have expressed concerns over both the age and broad popularity of the 81-year-old Biden and 77-year-old Trump.

5. Oil prices steady

Oil prices held above the flatline in European trade on Wednesday as steady production cuts by the OPEC+ and little de-escalation in the Israel-Hamas war heralded tighter supplies and countered persistent concerns over slowing demand.

Prices were nursing steep losses from the prior session after top importer China announced a largely underwhelming economic growth target for 2024, potentially signaling weak crude demand in the country. But the declines were moderated by some indications of tighter supplies. Ceasefire talks between Israel and Hamas have failed to make headway this week, pointing to continued possible disruptions in oil supplies out of the Middle East.

A smaller-than-expected build in U.S. inventories also helped limit losses, along with a decision by the Organization of the Petroleum Exporting Countries and its allies to maintain their current pace of production cuts until the end of June.

Brent oil futures expiring in May rose 0.4% to $82.33 a barrel, while West Texas Intermediate crude futures climbed 0.4% to $77.68 per barrel by 03:29 ET. Both contracts fell about 1% each on Tuesday.