Investing.com - Here are the top five things you need to know in financial markets on Tuesday, February 26:
1. Fed's Powell Heads to Congress
Powell's comments will be monitored closely for any new insight on his views on the economy and how that can affect monetary policy after the U.S. central bank adopted a more cautious stance on future interest rate hikes last month.
Investors are also hoping to get a better idea of the Fed's plan for shrinking its balance sheet.
The U.S. central bank, in its accompanying semi-annual Monetary Policy Report sent to Congress late last week, described a U.S. economy that was doing well on many fronts, but facing weaker growth in the year to come and a number of intensifying risks.
2. U.S. Futures Point to Lower Open
U.S. stock futures pointed to a lower open, as investors awaited the latest batch of corporate earnings and economic data while looking ahead to Powell's testimony.
At 5:35AM ET (10:35 GMT), the blue-chip Dow futures were down 80 points, or about 0.3%, the S&P 500 futures shed 7 points, or roughly 0.2%, while the tech-heavy Nasdaq 100 futures indicated a decline of 28 points, or around 0.4%.
Elsewhere, European stocks were lower, with nearly all major bourses across the continent in negative territory, with London's FTSE 100 faring the worst, down around 1%.
Earlier, Asian shares declined, as the optimism about U.S.-China trade talks that swept stocks in the region to fresh five-month highs cooled.
3. Home Depot , Macy's Report Earnings
As the fourth-quarter earnings season draws to a close, Home Depot (NYSE:HD) and Macy’s (NYSE:M) are some of the last notable names slated to report financial results.
The home improvement retailer, which is slated to report before the bell at 6:00AM ET (11:00 GMT), is expected to post earnings of $2.16 per share on revenue of $26.58 billion, according to analysts polled by Investing.com.
Macy's then reports at 8AM ET (13:00 GMT). The retailer is expected to earn $2.53 per share on revenue of $8.44 billion. Investors will be closely watching the results for a view of how challenged main street retailers are coping with the onslaught from online competitors such as Amazon (NASDAQ:AMZN).
Other headliners expected out today include Palo Alto Networks (NYSE:PANW), AutoZone (NYSE:AZO), Papa John's (NASDAQ:PZZA), Weight Watchers (NASDAQ:WTW), and Toll Brothers (NYSE:TOL).
Read more: Macy’s 2019 Outlook Is Crucial For Its Stock's Comeback: Haris Anwar
4. Busy Day on the Economic Calendar
Besides the Powell testimony, several important economic reports are also expected, with December housing data, which were delayed because of the 35-day government shutdown, topping the list.
The Commerce Department at 8:30AM ET (13:30 GMT) is expected to report building permits fell 2.8% in December to 1.290 million units.
Housing starts, meanwhile, are expected to drop 0.5% to 1.250 million units.
The latest report on home prices from S&P/Case-Shiller is then due at 9AM ET (14:00 GMT).
Recent data has painted a worrying picture of the U.S. housing market, which is struggling with rising mortgage rates and tight inventory.
Investors will also get a key piece of economic sentiment data when The Conference Board releases its February update on consumer confidence at 10:00AM ET (15:00 GMT). The consensus forecast is for a reading of 124.7, up from 102.2 in January.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was a shade lower at 96.16.
In the bond market, U.S. Treasury prices inched higher, pushing yields a tad lower across the curve, with the benchmark 10-year yield slipping to 2.66%.
5. May to Rule Out No-Deal Brexit
Sterling has rallied sharply after news reports showed both the major U.K. parties shifting their policies in an effort to head off a disruptive 'no-deal Brexit'.
The pound jumped 0.8% to $1.3202 (GBP/USD), a level last seen on Jan. 28.
U.K. Prime Minister Theresa May will propose formally ruling out a no-deal Brexit at a crunch cabinet meeting later in the day, The Sun newspaper reported.
That news follows a move by the opposition Labour Party last night to back a second referendum on Brexit if no parliamentary majority can be found for a withdrawal agreement that would ensure a smooth transition to life outside the European Union.
The news was a relief to investors who had feared Britain would crash out of the EU without a deal.
-- Reuters contributed to this report