News
Futures hold steady as Fed meeting minutes and data awaited
By Ankika Biswas and Lisa Pauline Mattackal
(Reuters) – U.S. stock index futures were little changed on Wednesday ahead of a holiday-shortened trading session, as markets also braced for a raft of economic data and minutes from the Federal Reserve’s June policy meeting for further guidance.
The stock market will close early on Wednesday and remain closed on Thursday for US Independence Day, keeping trading volumes low throughout the week.
The ADP National Employment report and weekly jobless claims are due before the opening bell, a day after data showed higher U.S. job openings as well as layoffs in May. That also comes ahead of Friday’s closely watched nonfarm payrolls data.
“Our view remains that we should see a slowdown in employment data in the coming months. If employment slows and the disinflation trend is intact, the Fed will make a rate cut in September,” wrote Jefferies’ chief European economist Mohit Kumar.
Market participants see a 65% chance of the first rate cut in September, and about two cuts by the end of the year, according to LSEG’s FedWatch data.
Other data points on the watch list include factory orders and services PMIs after markets open, along with the minutes of the Fed’s June meeting at 2 p.m. ET.
Gains in Tesla and megacap stocks helped the Nasdaq and S&P 500 close at record highs on Tuesday, a day when Fed Chairman Jerome Powell also acknowledged the “disinflationary path” while signaling the need for more data before cutting interest rates.
“A 25 bps cut may not make much difference to the economy, but if the Fed is proactive, no one can blame Powell for not doing his job by keeping rates high for longer and planning for a slowdown,” Jefferies’ Kumar added.
Tesla rose 2.7% in premarket trading after hitting its highest level since January on Tuesday following a smaller-than-expected drop in vehicle deliveries in the second quarter.
Nvidia fell 0.6%, in a recent choppy run for the AI chip leader after its impressive gains since 2023, even as other semiconductor stocks held their ground on the day.
Other megacaps, Alphabet, Microsoft, Meta Platforms and Amazon, rose between 0.2% and 0.6%.
While the S&P 500 has jumped more than 15% in the first half of 2024, largely supported by high-flying, high-profile technology stocks, the benchmark index’s weighted counterpart has risen just 5%, signaling a lack of broad-based market strength.
As of 7:09 a.m. ET, Dow e-minis were up 42 points, or 0.11%, S&P 500 e-minis were up 1.5 points, or 0.03%, and Nasdaq 100 e-minis were up 2.5 points, or 0.01%.
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Among other premarket moves, Paramount Global jumped 11.7% after Shari Redstone’s National Amusements reached a preliminary deal to sell its majority stake in the media giant to David Ellison’s Skydance Media.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Maju Samuel)