U.S. stock index futures were slightly lower Wednesday morning as a summit between President Donald Trump and North Korean leader Kim Jong Un got under way. Investors also awaited more testimony from the top-ranking Federal Reserve official.
At around 7 a.m. ET, Dow Jones Industrial Average futures were 69 points lower, indicating a decline of more than 80 points at the open. Futures on the S&P 500 and Nasdaq 100 were both seen relatively downbeat.
Stock futures also fell after Pakistan said it shot down two Indian jets and carried out air strikes in Kashmir. Tensions have been elevated since a suicide car bombing by Pakistan-based militants in Indian-controlled Kashmir killed at least 40 Indian paramilitary police on Feb. 14, but the risk of conflict rose dramatically on Tuesday when India launched an air strike on what it said was a militant training base.
The Trump-Kim summit comes ahead of their second summit in less than a year, with investors monitoring whether the meeting can break a stalemate over Pyongyang's nuclear weapons and end more than 70 years of hostility. Trump said he hoped the summit will be "equal or greater" relative to last year's meeting with Kim.
In the U.S., Fed Chairman Jerome Powell is scheduled to testify in front of a House committee. On Tuesday, he told members of the Senate Banking Committee the central banks remains "patient" in its approach to monetary policy. Powell also described the U.S. economic outlook as "generally favorable" but one that faces challenges from abroad.
The Fed has been caught in a market crossfire in the past several months, triggered by worries it was on a set policy path and would continue tightening even if conditions weakened.
However, more recently, officials have been conveying a message of patience with the future policy path, including both the approach to interest rates and to reducing the bonds the Fed holds on its balance sheet.
On the data front, advanced economic indicators for December will be released at around 8:30 a.m. ET. Pending home sales for January and factory orders for December are both set to follow later in the session.
On Tuesday evening, the futures contracts for U.S. stock indexes, Treasurys and commodities were temporarily halted for several hours. It followed a technical fault at CME Group.
— CNBC's Jeff Cox and Reuters contributed to this report.
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February 27, 2019 at 07:10PM
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