Stock futures are flat Tuesday night following a selloff fueled by Powell’s comments: Live updates

U.S. stock futures were flat on Tuesday night. The action comes after a selloff fueled by Federal Reserve Chairman Jerome Powell’s comments indicating interest rates may need to go higher for longer.

Dow Jones Industrial Average futures ticked higher by 21 points, or 0.06%. S&P 500 and Nasdaq 100 futures added 0.05% and 0.08%, respectively.  

In regular trading Tuesday, the Dow closed nearly 575 points lower and turned negative for 2023. The S&P 500 slid 1.53% to close below the key 4,000 threshold, and the Nasdaq Composite lost 1.25%. The sharp decline for stocks was accompanied by a spike in bond yields, with the rate on the 2-year Treasury surpassing 5% and touching the highest level since 2007.

The shakeup in markets came after Fed Chairman Jerome Powell spoke before the Senate Banking, Housing and Urban Affairs Committee. Powell cautioned lawmakers that the central bank’s terminal rate will likely be higher than previously anticipated due to stubbornly high economic data in recent weeks. 

“[Powell] is being very, very clear that if you look at what happened over the past year and a half, the call on inflation didn’t pan out,” Morgan Stanley’s global chief economist Seth Carpenter said on CNBC’s “Closing Bell: Overtime.”

“I think now Powell is very much on board with the idea that he does not want to get caught flat-footed again, and so opening the door very wide for a 50 basis point hike was exactly what he did,” Carpenter added.

On Wednesday, investors will be closely watching Powell speak before the House Financial Services Committee. Separately, Richmond Fed President Tom Barkin will also be speaking on the labor market Wednesday morning. January’s job openings and labor turnover data is due, as is the ADP jobs report.