Stock futures rise after Bullard boosts rate cut hopes

[June 04, 2019]   By Medha Singh

(Reuters) - U.S. stock index futures rose on Tuesday after a senior Federal Reserve official pointed the way to a cut in interest rates in response to slowing economic growth, helping Wall Street recover from a selloff in technology stocks a day earlier.

St. Louis Fed President James Bullard said late on Monday that a rate cut "may be warranted soon", driving Fed funds futures to price in a 67% chance the central bank would reduce key short-term borrowing costs at its July 30-31 policy meeting.
 

That would provide a fillip to the Wall Street, whose three main indexes have shed at least 6% in May after a sudden flare up in trade tensions and Washington's threat to slap tariffs on Mexican goods.

"We are looking for circuit breakers to put an end to a slide in sentiment in the United States. A significant dovish move in central banks or a resolution in trade could be the big circuit breakers," said Florian Hense, European economist at Berenberg.

Investors will be paying close attention to Fed Chairman Jerome Powell's speech before a monetary policy conference in Chicago later in the day for his economic outlook.

High-profile technology companies Amazon.com, Apple Inc, Facebook Inc and Google-parent Alphabet Inc were up marginally in premarket trading after tumbling a day earlier on fears of being the targets of U.S. government antitrust regulators.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2019. REUTERS/Brendan McDermid

The Nasdaq has lost 10.2% since its May 3 all-time high, confirming a correction territory, while the S&P 500 is 7.6% away from its record high hit on May 1.

At 7:16 a.m. ET, Dow e-minis were up 106 points, or 0.43%. S&P 500 e-minis were up 10.75 points, or 0.39% and Nasdaq 100 e-minis were up 25.5 points, or 0.36%.

Among other movers, Ventas Inc fell 2.5% after it agreed to buy a portfolio of Canadian Seniors Housing communities in partnership with Le Groupe Maurice in a deal valued at $1.8 billion.

Data at 10:00 a.m. ET is expected to show U.S. factory orders fell 0.9% in May compared to 1.9% rise the month before.

(Reporting by Medha Singh and Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)

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