Futures extended their losses Friday following a weaker-than-expected second quarter GDP report and as investors cautiously waited for Bernanke's speech at a banking conference in Jackson Hole, Wyoming.
Stocks rallied earlier in the week as investors hoped the Fed may announce a new porgram to support the weakening economy. However, the major indexes slid in the previous session as more analysts grew skeptical that Bernanke would implement a fresh round of asset purchases.
This time last year, Bernanke laid the groundwork for the Fed's $600 billion bond-buying program to revive the economy. However, he is not expected o announce a third round of bond buying given the Fed has already bought $2.3 trillion in longer-term securities.
According to analysts, Bernanke could acknowledge the economy's strains and may show a willingness to take other, relatively modest, steps to shore up the recovery. (Read More: Fed Too Pessimistic, More Easing Not Needed—Plosser)
“We’re not expecting QE3 … we don’t think that’s in the cards,” said Phil Orlando, Chief Equity Market Strategist at Federated Investors. “While employment is high enough for the Fed to consider an intervention, inflation’s in the Fed’s sweet spot.”
On the economic front, the economy grew much slower than expectedin the second quarter as GDP rose at an annual rate of 1 percent, according to the Commerce Department, a downward revision of its prior estimate of 1.3 percent. Economists had expected the growth to be revised down to 1.1 percent.
“In light of the environment we’ve been dealing with over the last few months, the whisper number suggested that the GDP figure could have been negative,” said Orlando. “So it was a moral victory that we had a positive number.”
The Thomson Reuters/University of Michigan Surveys of Consumers will release the August final consumer sentiment index at 9:55 am ET. Economists in a Reuters survey expect a reading of 56 compared with 54.9 in the preliminary August report.