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The
tech-heavy Nasdaq and the blue-chip Dow closed at two-week lows
on Tuesday as Treasury yields rose to multi-month highs in the
wake of stronger-than-expected manufacturing activity and
factory orders data that raised doubts whether the Fed will cut
interest rates thrice in 2024 as widely expected.
The benchmark 10-year U.S. Treasury yield edged up to 4.377% on
Wednesday, having touched a 2024 peak of 4.05% in the prior
session. [US/]
March private payrolls and services sector data later in the day
could offer fresh insights on the U.S. economy.
A slew of U.S. central bank officials including Powell are also
slated to speak during the day. Powell's speech is due at 1210
ET (1610 GMT).
Traders are pricing in a 62% chance that the Fed will cut
interest rates by 25 basis points in June, according to
CMEGroup's FedWatch tool, slightly down from about 64% a week
ago.
Market participants have also pared back their expectations on
the number of rate cuts to about two this year from three a few
weeks ago, according to LSEG's rate probability app.
Cleveland Fed Bank President Loretta Mester and San Francisco
Fed Bank President Mary Daly said on Tuesday they think it would
be "reasonable" to cut U.S. interest rates three times this
year, even as stronger recent economic data has sown investor
doubts about that outcome.
Focus will shift to the Labor Department's jobs report on Friday
that is expected to show U.S. nonfarm payrolls increased by
200,000 jobs in March, following 275,000 job additions in
February.
At 5:59 a.m. ET, Dow e-minis were down 40 points, or 0.1%, S&P
500 e-minis were down 12 points, or 0.23%, and Nasdaq 100
e-minis were down 62.5 points, or 0.34%.
Intel fell 5.3% in premarket trading after the chipmaker
disclosed $7 billion in operating losses for its foundry
business in 2023, steeper than the $5.2 billion reported the
year before.
Tesla dipped 0.8%, adding to its near 5% drop on Tuesday after
the automaker missed first-quarter delivery estimates.
Paramount Global gained 4.1% after a report said the media giant
has been discussing entering into talks with David Ellison, the
founder of the Skydance media company, for a potential deal.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb
Chakrabarty)
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