US pre-open: Futures mostly flat following Dow's best showing since March

Wall Street futures had major indices opening slightly higher ahead of the bell on Tuesday after the Dow Jones Industrial Average turned in its best performance since March a day earlier.

As of 1230 BST, Dow Jones futures were up 0.02%, while S&P 500 and Nasdaq-100 futures were 0.08% and 0.21% lower, respectively.

The Dow closed 586.89 points higher on Monday, reversing losses recorded in the final session of the previous week.

AJ Bell's Russ Mould said: "Well that didn't last too long. After getting into a lather about the accelerated timetable for potential interest rate hikes announced by the US Federal Reserve last week, markets seem to have regained their poise.

"The catalyst seemed to be messaging from Fed officials which softened the hawkish tone of last Wednesday's meeting, plus also a realisation that any rate increases are still two years away."

Tuesday's main focus will be testimony from Federal Reserve chairman Jerome Powell before the House of Representatives at 1900 BST, where he will discuss the central bank's response to the Covid-19 pandemic.

Powell's remarks, released ahead of the hearing, will likely support the expectation that the Federal Reserve will shortly look to discuss removing a number of the unprecedented stimulus measures it put into place as a result of the pandemic.

"Since we last met, the economy has shown sustained improvement," Powell will say. "Widespread vaccinations have joined unprecedented monetary and fiscal policy actions in providing strong support to the recovery. Indicators of economic activity and employment have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades."

While the Fed head will acknowledge that inflation has "increased notably" in recent months," he will also note that the majority of these increases appear to be only temporary in their effect and that inflation should settle back to 2% over the long term.

On the macro front, the Federal Reserve Bank of Philadelphia will release its May non-manufacturing business data at 1330 BST, while existing home sales figures for May will be published at 1500 BST, as will the Richmond Fed's June manufacturing index.

In the corporate space, stock in Google parent company Alphabet traded lower after the European Commission launched a probe into search engine's advertising unit.