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The
U.S. Labor Department's consumer price index (CPI) reading, due
at 8:30 a.m. ET, is expected to show inflation rose 0.2% last
month compared with a 0.4% jump in April, with core inflation
likely to have remain unchanged at 0.4%.
The Fed will commence its two-day policy meeting later in the
day, with an interest rate decision due on Wednesday, followed
by Chair Jerome Powell's news conference.
Traders see a nearly 80% chance that the central bank will hold
interest rates at the 5%-5.25% range, while pricing in an almost
60% chance of a 25-basis-point hike in July, according to the
CME Fedwatch tool.
"We expect a further deceleration in both the headline and core
indices. This, in turn, might convince investors that the FOMC
will likely announce a pause on rates tomorrow," UniCredit
analysts said.
"However, the market has certainly not rejected the possibility
of a last rate hike in either July or September."
The S&P 500 and the Nasdaq logged their highest closing levels
since April 2022 on Monday, lifted by market heavyweights
including Amazon.com, Apple and Tesla.
The benchmark S&P 500 has risen 21% from its October 2022 lows,
heralding a bull market according to some investors.
At 6:58 a.m. ET, Dow e-minis were up 6 points, or 0.02%, S&P 500
e-minis were up 4.5 points, or 0.1%, and Nasdaq 100 e-minis were
up 41.25 points, or 0.28%.
Oracle Corp jumped 4.9% premarket as the software firm topped
quarterly revenue estimates and forecast an upbeat current
quarter, while Intel Corp gained 1.5% after the chipmaker
entered in talks with SoftBank Group Corp's Arm to be an anchor
investor in its initial public offering (IPO).
Apple slipped 0.8% after UBS downgraded the iPhone maker to
"neutral" from "buy".
Advanced Micro Devices rose 1.8% ahead of unveiling details
about its "AI Superchip".
Bunge Ltd slipped 2.5% after the U.S. grains merchant and
Glencore-backed Viterra announced an $18 billion merger deal,
including debt.
U.S.-listed shares of Chinese companies including JD.com ,
Alibaba Group, Baidu Inc and Netease Inc rose between 2.2% and
4.7% after China's central bank lowered a short-term lending
rate for the first time in 10 months.
(Reporting by Shristi Achar A and Sruthi Shankar in
BengaluruEditing by Vinay Dwivedi)
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