LDN - Business

Futures muted as investors await more economic data

[March 13, 2024] By Bansari Mayur Kamdar and Johann M Cherian

(Reuters) -U.S. stock index futures were subdued on Wednesday as investors awaited a slew of economic data this week, including producer prices and retail sales numbers, for hints on the Federal Reserve's policy path.

The benchmark S&P 500 climbed to a fresh record high on Tuesday as Oracle shares surged and slightly hot consumer price data failed to dampen hopes of interest-rate cuts in the coming months.

Despite inflation still away from the central bank's target of 2%, investors have taken solace in the fact that the Fed still sees credit conditions easing in 2024, while the economy remains resilient.

Traders now see a 66% chance of the first rate cut coming in June, the CME FedWatch Tool showed. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current range of 5.25% to 5.50%.

"While the February CPI data was noisy across segments, we believe the U.S. economy continues to be in good shape and is heading for a soft landing," said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

On tap later this week is economic data that includes the February producer prices figures on Thursday, which could offer more insight into inflation in the world's largest economy.

At 6:44 a.m. ET, Dow e-minis were up 41 points, or 0.11%, S&P 500 e-minis were up 2 points, or 0.04%, and Nasdaq 100 e-minis were down 14.75 points, or 0.08%.

Some market participants believe the relentless U.S. stock market rally is poised for a breather, even if it remains unclear whether equities are in a bubble or a strong bull run.

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A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2024. REUTERS/Brendan McDermid

Most megacap growth and technology stocks edged down in premarket trading.

Tesla dropped 2.1% in trading before the bell after brokerage Wells Fargo downgraded the electric-vehicle maker to "underweight" from "equal weight".

AI giant Nvidia inched 0.6% up following its 7.1% jump in the previous session.

Dollar Tree lost 8.5% after the discount chain store group said it would close nearly 1,000 stores in the first half of the year and incurred a net loss for the previous quarter, hurt by an over $1 billion goodwill impairment charge. Peer Dollar General also slid 2.7%.

Intel shed 1.5% after a report that the Pentagon had pulled out of a plan to spend as much as $2.5 billion on a chip grant to the company.

Crypto stocks such as MicroStrategy, Marathon Digital and Bit Digital added 1.3% to 4.6% as bitcoin prices bustled to their third straight intraday record high of $73,678.

GE HealthCare Technologies was down 5.6% as General Electric is to cut its stake in the medical equipment firm.

(Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Pooja Desai)

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