NEW YORK, June 22 — Wall Street is set to open lower today, a day after Federal Reserve Chair Jerome Powell stuck to his hawkish stance on interest rate path and ahead of his second day of testimony before a Senate committee.

Powell told lawmakers in Washington yesterday that the outlook for further rate increases are "a pretty good guess” of where the central bank is heading if the economy continues in its current direction.

Financial markets, however, are still pricing in a 25-basis-point rate increase in July and no further hikes after that, according to CME FedWatch tool.

After Powell reinforced the Fed’s inflation objective, shares of megacap companies led the declines in US stocks for the third straight day yesterday.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, said investors are worried that a rally that has been largely driven by a narrow group of stocks was "ripe”.

"In addition to that, Powell’s testimony in front of Congress yesterday did nothing to dispel concerns that perhaps the pause we had in the June meeting was simply that,” he said.

Meanwhile, there were early signs of a softening labor market as a report showed that number of people filing for state unemployment benefits for the first time held steady at a 20-month high last week.

Yields on the 2-year and 10-year Treasury notes were little changed after the data and ahead of Powell’s testimony before the US Senate Banking Committee at 10 a.m. ET.

Shares of Tesla slid 3.3 per cent before the bell after Morgan Stanley downgraded the electric automaker to "equal weight” from "overweight”.

At 8:52 a.m. ET, Dow e-minis were down 74 points, or 0.22 per cent, S&P 500 e-minis were down 10 points, or 0.23 per cent, and Nasdaq 100 e-minis were down 49.25 points, or 0.33 per cent.

Spirit AeroSystems tanked 9.1 per cent and planemaker Boeing slipped 2.7 per cent as the parts supplier said it will suspend production at its plant in Wichita, Kansas, after workers announced a strike from June 24.

US-listed shares of Accenture fell 4.4 per cent after the IT consulting firm forecast fourth-quarter revenue below market expectations.

Darden Restaurants slid 3.8 per cent after the Olive Garden parent forecast its annual outlook below estimates. — Reuters