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Money markets are largely expecting the central bank to stay pat
on interest rates this meeting, while pricing in just about 35
basis points (bps) of rate cuts this year, down from about 150
bps estimated at the start of the year, according to LSEG data.
"Although the world's largest economy slowed more sharply than
expected in the first three months of the year, key inflation
readings show inflation remains stubborn and that's dashed hopes
for early and multiple rate cuts," Susannah Streeter, head of
money and markets at Hargreaves Lansdown, said.
"If interest rates do linger for a lot longer, it (raises)
concerns about the growth prospects for the engine of the global
economy."
U.S. stocks ended higher on Monday, with sharp gains for Tesla
and Apple.
Tesla shares were down 2.3% in premarket trading on Tuesday,
following its 15% surge in the previous session after a report
that CEO Elon Musk has dismissed two senior executives and plans
to lay off hundreds more employees.
U.S. equities have had a rough April as persistent inflationary
pressures sharply pulled back bets on interest rate cuts, while
heightened tensions in the Middle East and earnings updates also
added to the volatility.
All three U.S. stock indexes are poised to record their first
monthly loss in six.
Also in focus is the quarterly earnings season, with companies
such as Eli Lilly, Coca-Cola and 3M, among others, scheduled to
report results before the opening bell.
At 05:32 a.m., Dow E-minis were down 28 points, or 0.07%, S&P
500 E-minis were down 7 points, or 0.14%, and Nasdaq 100 E-minis
were down 22.75 points, or 0.13%.
Coursera shed 12.7% premarket after the online learning platform
forecast its full-year revenue below market estimates.
(Reporting by Shristi Achar A in Bengaluru; Editing by Shounak
Dasgupta)
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