Futures recover after inflation jitters dent Wall Street
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[May 24, 2024] By
Ankika Biswas and Lisa Pauline Mattackal
(Reuters) -U.S. stock index futures rose on Friday, rebounding after
Wall Street closed lower in the previous session on signs of persistent
inflation that rekindled monetary policy caution ahead of a long
weekend.
After riding high on Nvidia's blowout revenue forecast and a 10-for-one
stock split in early trade on Thursday, all three main indexes turned
lower as economic data pointing to rising price pressures dented bets of
interest-rate cuts this year.
"Recent comments from Fed officials, stronger-than-expected PMI data
resulted in a push-back on expectations for Fed cut trajectory," OCBC
strategists said in a note.
"These developments reinforced the view that markets remain sensitive to
data. The data also served as a reminder that the current
high-for-longer rates environment may persist for a longer period."
Investor focus now shifts to more economic data including durable goods
for April and the University of Michigan's final consumer sentiment,
along with remarks from Fed Board Governor Christopher Waller - all
scheduled for the day.
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Traders expect the U.S. central bank to ease its interest rates by 35.6
basis points by year-end.
The blue-chip Dow logged its biggest one-day drop since March 2023 on
Thursday while the benchmark S&P 500 recorded its worst session in over
three weeks. Both the indexes were set for weekly losses after four
straight weeks of gains.
Nvidia shares gained 1% in premarket trading after jumping over 9% a day
earlier, closing above the key $1,000 mark and adding around $218
billion to its market value.
Reuters reported the company's most advanced AI chip developed for China
had a weak start, with abundant supply forcing it to be priced below
Huawei's rival chip.
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Traders work on the trading floor at the New York Stock Exchange
(NYSE) in New York City, U.S., April 5, 2024. REUTERS/Andrew
Kelly/File Photo
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Other megacap stocks including Apple, Alphabet and Meta Platforms
were also up between 0.4% and 0.8%.
The U.S. equity market will be closed on Monday on account of
Memorial Day.
At 7:03 a.m. ET, Dow e-minis were up 53 points, or 0.14%, S&P 500
e-minis were up 14.75 points, or 0.28%, and Nasdaq 100 e-minis were
up 54.25 points, or 0.29%.
Boeing shares rose 0.7%. The company was the biggest drag on the Dow
in the previous session, closing over 7% lower.
Meanwhile, the U.S. Securities and Exchange Commission approved
applications from Nasdaq, CBOE and NYSE to list exchange-traded
funds (ETFs) tied to ether prices, potentially paving the way for
products to begin trading later this year.
However, ProShares Ether Strategy ETF was down 2.4% after jumping
more than 22% so far this week.
Workday dropped 12.1% after the human resources software provider
cut its annual subscription revenue forecast.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing
by Devika Syamnath)
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