Wall Street Set for Losses After Powell's Hawkish Remarks

US stocks were set for a downbeat session Wednesday as traders digested hawkish comments from Federal Reserve Chair Jerome Powell and downbeat quarterly earnings from retailer Target TGT.

Dow Jones Industrial Average futures fell 295 points, or 0.9%, S&P 500 futures dropped 48 points, or 1.2% and Nasdaq futures slumped 194 points, or 1.6%.

In an interview on Tuesday at the Wall Street Journal Future of Everything Festival, Powell said the Federal Open Market Committee "will not hesitate" to move rates beyond neutral as needed.

Oil prices surged, with front-month global benchmarks Brent crude and West Texas Intermediate crude were both up more than 1%, on and prospects of rising demand amid easing COVID-19 restrictions in China.

At 8:30 am ET, data showed housing starts fell to a 1.724 million annual rate in April from 1.728 million rate in the previous month, compared with estimates for a 1.756 million rate; while housing permits dropped to 1.819 million from 1.879 million previous, compared with the 1.814 million rate expected, according to Bloomberg data.

Shares of Russian stocks and Russia-focused exchange-traded funds remain halted on US exchanges.

In other world markets, Japan's Nikkei closed 0.9% higher, Hong Kong's Hang Seng closed 0.2% higher, and China's Shanghai Composite closed 0.2% lower. Meanwhile, UK's FTSE 100 fell 0.42% and Germany's DAX index declined 0.60% in Europe's early afternoon session.

On the winning side, National CineMedia NCMI shares rose 20% after AMC Entertainment disclosed a 6.8% stake in the company.

On the losing side, Lowe's LOW shares fell 3.1% after the company posted lower fiscal Q1 sales. Target Corporation TGT shares tumbled 25% after the company posted lower Q1 adjusted earnings despite higher revenue.