Home Depot, Caterpillar shares dip as investors await Monetary policy testimony

U.S. stock futures edged lower on Tuesday, hit by losses in Home Depot and Caterpillar shares, while investors awaited Federal Reserve Chair Jerome Powell's testimony on monetary policy. Shares of the largest U.S. home improvement retailer fell 2.6 per cent after the company issued a disappointing full-year earnings forecast and missed quarterly estimates for same-store sales. Smaller rival Lowe's Co Inc also fell 1.4 per cent.

Caterpillar Inc shares took a hit, falling 3.8 per cent, after brokerage UBS double downgraded the company's shares to "sell". Investors are awaiting Powell's testimony at 10 a.m. ET (1500 GMT), after the central bank last month shifted to a more cautious stance on further interest rate hikes.

"A cautious mood develops ahead of Powell's testimony on monetary policy to the U.S. Senate Committee, as he will be drilled during the Q&A session," said Peter Cardillo, chief market economist at Spartan Capital Securities in a client note. At 7:12 a.m. ET, Dow e-minis were down 93 points, or 0.36 per cent. S&P 500 e-minis were down 5.25 points, or 0.19 per cent and Nasdaq 100 e-minis were down 20.25 points, or 0.28 per cent.

Stocks have been bolstered in recent weeks by trade optimism and dovish signals from the Fed, with the benchmark S&P 500 index about 4.8 per cent away from its record closing high in September. Wall Street ended higher on Monday after President Donald Trump said he would delay a planned hike in tariffs on Chinese imports, the clearest sign yet the two countries were closing in on an agreement to end their prolonged trade spat.

On the economic front, a report from the Commerce Department, expected at 8:30 a.m. ET, will likely show housing starts dipping in December, compared with November. Separately, the Conference Board's consumer confidence index likely rose to 124.7 this month, from a reading of 120.2 in January. The report is expected at 10 a.m. ET.