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Stock futures fall on Wednesday, Fed chair Powell says higher rates likely, US sues to block JetBlue purchase of Spirit Airlines, Altria to buy e-cigarette startup NJOY, Adidas to post first loss in 3 decades
Stock futures tumbled on Monday following statements from Federal Reserve Chairman Jerome Powell on Tuesday that the next round of interest rate hikes is “likely to be higher” than previously anticipated.
On Wednesday morning, S&P 500 futures dropped -4.5 points, or -0.11%, while Dow Jones futures fell -26 points, or -0.08%, and NASDAQ futures slid -15.75 points, or -0.13%, Yahoo Finance reported.
The benchmark US 10-Year Treasury slipped -0.046 for a yield of 3.929%, while the 2-Year Treasury slid -0.002 with a yield of 5.009% as of 8:45 AM EST.
In oil futures, WTI crude declined -0.45% and was trading at $77.23 a barrel, while Brent crude fell -0.22% and traded at $83.11 a barrel as of 8:46 AM ET.
In prepared remarks for appearances this week on Capitol Hill, Federal Reserve Chairman Jerome Powell warned on Tuesday that interest rates are likely to move higher than central bank policymakers had expected, CNBC reported. Powell said the current trend demonstrates that inflation-fighting efforts by the Federal Reserve are not over.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in prepared remarks. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
US Justice Department Attorney General Merrick Garland held a news conference on Tuesday announcing an antitrust lawsuit aimed at blocking JetBlue Airways from its $3.8 billion purchase of Spirit Airlines, Yahoo reported.
“If allowed to proceed, this merger will limit choices and drive up ticket prices for passengers across the country” and “eliminate Spirit’s unique and disruptive role in the industry,” Garland said, adding the deal would mean the end of the nation’s biggest “ultra-low-cost carrier.”
Marlboro maker Altria has agreed to buy e-cigarette startup NJOY for $2.75 billion. The deal comes after Altria dropped its stake in e-cigarette maker Juul Labs in a move aimed at strengthening its portfolio of smoke-free products. One of the startup’s flagship products, NJOY ACE, is the only pod-based e-vapor product with market authorizations from the FDA, CNBC reported. Altria’s Juul stake was recently valued at $250 million, according to Reuters.
After scrapping a highly lucrative partnership with rapper and fashion designer Ye – formally known as Kanye West – and his Yeezy brand, Adidas warned they will experience his first annual loss in three decades. The German sportswear company posted a fourth-quarter operating loss of 724 million euros and a net loss from continuing operations of 482 million euros, CNBC reported.
