US markets stable before Fed chief addresses Congress again

NEW YORK (AP) — Wall Street is poised to open higher at Thursday’s opening bell a day after the head of the Federal Reserve acknowledged that a recession is possible.

Futures for the Dow Jones Industrial Average rose 0.6% and futures for the S&P 500 jumped 0.8%.

Global shares are largely moving higher and oil prices are stable.

Fed Chair Jerome Powell, will address Congress again after saying Wednesday that a recession was “certainly a possibility” as the U.S. central bank tries to rein in inflation that is running at a four-decade high.

“The market now accepts recession is a risk, having been in total denial,” said Michael Every of Rabobank in a report.

Last week, the Fed raised its benchmark rate by three quarters of a percentage point, three times its usual margin and the biggest increase in nearly three decades.

Investors worry U.S. and European rate hikes might derail global growth, but Powell said it is “absolutely essential” that the Fed restore stable prices.

“We now anticipate the most aggressive and synchronized tightening cycle” by global central banks since the 1980s, said Jennifer McKeown of Capital Economics in a report. “The key question now is not whether central banks will slam on the brakes, but what might stop them?”

In midday trading, the FTSE 100 in London was up 0.2% and the CAC in Paris rose 0.5%. Frankfurt’s DAX declined 0.3%.

In Asia, the Shanghai Composite Index rose 1.6% to 3,320.15 and the Nikkei 225 in Tokyo added less than 0.1% to 26,171.25. The Hang Seng in Hong Kong gained 1.3% to 21,273.87.

The Kospi in Seoul retreated 1.2% to 2,314.32 while Sydney’s S&P-ASX 200 rose 0.3% to 6,528.40.

India’s Sensex gained 0.7% to 52,194.52. New Zealand, Singapore and Jakarta advanced while Bangkok fell.

Also Thursday, the Philippine central bank raised its key rate by one-quarter percentage point while Indonesia’s central bank left rates unchanged.

On Wednesday, the S&P 500 lost 0.1% after swinging between a gain of 1% and a loss of 1.3% during the day.

The Dow and the Nasdaq composite both slipped 0.2% to 11,053.08.

Fed policymakers say they anticipate more rate hikes this year and next and at a quicker tempo than previously forecast. They say the U.S. central bank’s key rate should reach 3.8% by the end of 2023, its highest level in 15 years.

Surging prices have soured consumer sentiment in the United States, the world’s biggest market. Retail spending is sagging.

Inflation fears have been aggravated by a spike in prices of oil, wheat and other commodities due to Russia’s attack on Ukraine.

Oil prices fell for a second day, suggesting traders anticipate weaker demand as economic activity cools.

Benchmark U.S. crude dipped 53 cents to $105.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract declined $3.33 on Wednesday to $106.19. Brent crude, the price basis for international trading, retreated fell 43 cents to $108.22 per barrel in London. It sank $3.12 the previous session to $108.65.

The dollar fell to 135.57 yen from Wednesday’s 136.28 yen. The euro sank to $1.0514 from $1.0566.

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