US stocks continue retreat ahead of Powell testimony

NEW YORK: Wall Street opened in the red on Tuesday, leaving US stocks down for the third straight session as investors awaited this week's testimony from Federal Reserve Chairman Jerome Powell.

Stock prices have retreated from last week's record highs as hopes faded that the Fed will make an unusually deep cut in interest rates this month, following a strong employment report.

While all eyes are on Powell's comments Wednesday and Thursday, markets also were expecting stalled US-China trade talks to restart this week.

About 25 minutes into the trading day, the Dow Jones Industrial Average had lost 0.5 percent to 26,684.15.

The broader S&P 500 dropped 0.3 percent to 2,967.08 while the tech-heavy Nasdaq slipped 0.1 percent to 8,087.11.

A robust report on US job creation in June last week dampened hopes the Fed could cut interest rates by as much as 50 basis points later this month.

Meanwhile, top White House economic advisor Larry Kudlow said Tuesday that Powell's job was not in danger despite Trump's very public displeasure with the central bank.

Analyst Patrick O'Hare wrote at Briefing.com that Wall Street was also concerned the federal government could run out of money sooner than expected amid fraught congressional efforts to raise the borrowing limit.

"In any event, buyers in the stock market are holding their fire for the time being," he said.

Among big movers, Dow member 3M was down 2.4 percent after being downgraded by analysts.

Fellow Dow member Boeing was off 0.3 percent ahead of a company report on orders and deliveries due later on Tuesday.