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Most megacap and growth stocks rose slightly in premarket
trading, with Google-parent Alphabet up more than 1%.
A reading of producer prices and the weekly jobless claims
report are both expected at 8:30 a.m. ET.
Jobless claims will be in focus given the Fed's scrutiny of the
labor market's health. Economists polled by Reuters have
forecast a reading of 230,000.
A string of weakening employment and economic growth data over
the past few weeks had led to rising bets on a larger-than-usual
50-basis point interest rate reduction from the U.S. central
bank, but those expectations have largely faded.
After Wednesday's inflation report, traders now see an 87%
chance of the Fed cutting interest rates by 25 bps when it meets
on Sept. 17-18, according to CME's FedWatch Tool. It would be
the first rate cut since March 2020.
"Our base case forecast looks for a 25 bps reduction in the
federal funds rate at the September FOMC meeting followed by two
50 bps rate cuts at the November and December FOMC meetings,"
analysts at Wells Fargo said.
"We believe the 225 bps of cumulative monetary policy easing
that we project over the next nine months or so will be enough
to keep this economic expansion intact."
Nvidia, which rallied 8.2% on Wednesday following a report the
U.S. government is considering allowing the firm to export
advanced chips to Saudi Arabia, looked set to extend its winning
run and was up 0.7% before the bell.
S&P 500 E-minis were up 9.25 points, or 0.17%, Nasdaq 100
E-minis were up 21.75 points, or 0.11%, Dow E-minis were up 77
points, or 0.19%.
Futures tracking the economically sensitive small-cap Russell
2000 rose 0.5%.
On Wednesday, a boost from the tech sector offset investor
disappointment following the inflation data.
The tech-heavy Nasdaq closed more than 2% higher, while the S&P
500 closed up 1% in volatile trading which saw the benchmark
index fall as much 1.5% intraday.
U.S. consumer prices rose slightly in August, but underlying
inflation showed some stickiness. The core reading, which
excludes volatile food and energy components, climbed 0.3%
compared to an estimated 0.2% increase.
Vaccine maker Moderna slumped 9% in premarket trading on
Thursday after forecasting sales between $2.5 billion and $3.5
billion next year, below analysts' estimates.
(Reporting by Shashwat Chauhan and Lisa Mattackal in Bengaluru;
Editing by Shounak Dasgupta)
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