S&P futures about 1% below record level ahead of Powell testimony

© Reuters. FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York, U.S., February 12, 2021. REUTERS/Brendan McDermid

By Devik Jain

(Reuters) - S&P futures held about 1% below record highs on Tuesday as investors looked to Federal Reserve Chair Jerome Powell's remarks for clues on how the central bank is balancing inflation risk with its promise to ensure a full jobs market recovery.

In his prepared remarks released late Monday afternoon, Powell said inflation has "increased notably in recent months" but regarded the recent jump, in fact, as likely to fade. The Fed chief is due to speak before Congress at 2 p.m. ET (1800 GMT).

The Dow jumped more than 500 points on Monday following last week's selloff, as the Fed's hawkish tone triggered a sharp profit booking on the companies expected to benefit the most from a U.S. economic revival and a move into tech-heavy growth names.

"Powell will repeat that inflation is transitory and will drop back 'as these transitory supply effects abate'," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. 

"How much time do we have before the supply effects abate is a big question."

However, in a broad-based rally on Monday, the Dow logged its best day since early March as market participants piled back into energy, financials and industrial stocks.

At 6:31 a.m. ET, Dow e-minis were down 3 points, or 0.01%, S&P 500 e-minis were down 1.25 points, or 0.03%, and Nasdaq 100 e-minis were down 3.5 points, or 0.02%.

Heavyweights including Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) Inc dipped about 0.5% each.

"Meme stock" Torchlight Energy Resources (NASDAQ:TRCH) Inc jumped 10.5% in heavy premarket volume as the company upsized its stock offering after its shares doubled in value last week on interest from individual traders.

Crypto stocks including miners Riot Blockchain (NASDAQ:RIOT), Marathon Patent Group, Ebang International and MicroStrategy Inc fell between 2% and 3% as China's crackdown on bitcoin mining expanded to the province of Sichuan.