Final hours! Save up to 55% OFF InvestingProCLAIM SALE

US stock futures flat in holiday-thinned trade; rate cut bets grow

Published 04/07/2024, 00:50
© Reuters.
US500
-
DJI
-
ESH25
-
1YMH25
-
NQH25
-
IXIC
-

Investing.com-- U.S. stock index futures moved little in evening deals on Wednesday with trading volumes set to remain slim due to the Independence Day holiday.

But Wall Street still hit record highs in shortened trade on Wednesday, as weak data fuelled increased expectations that the Federal Reserve will begin cutting interest rates from September.

S&P 500 Futures steadied at 5,590.50 points, while Nasdaq 100 Futures were flat at 39,646.0 points by 19:09 ET (23:09 GMT). Dow Jones Futures were flat at 39,646.0 points.

Rate cut hopes put Nasdaq, S&P 500 at record highs

A swathe of weak readings on the labor market saw traders ramp up bets that the Fed will enact a 25 basis point cut in September. 

ADP nonfarm employment data read weaker than expected for June, while weekly jobless claims grew more than expected. The readings spurred hopes that Friday’s nonfarm payrolls data will signal some cooling in employment, which is a key consideration for the Fed in cutting rates.

Tracking this notion, the S&P 500 rose 0.5% to 5,537.02 points, while the NASDAQ Composite rose 0.9% to 18,188.30 points. The Dow Jones Industrial Average lagged, falling 0.1% to 39,308.0 points.

Investors remained largely biased towards megacap growth stocks, particularly technology, with hype over artificial intelligence also factoring into sentiment. 

The CME Fedwatch tool showed traders pricing in a nearly 66% chance of a 25 basis point cut in September, up from 59.5% a day ago.

But other signals, specifically from the Fed, sparked little optimism over rate cuts. 

Fed minutes show officials not confident in rate cuts 

The minutes of the Fed’s June meeting, released on Wednesday, showed that while officials did see that the U.S. economy was cooling, they were still not confident that the central bank should begin trimming interest rates.

Sticky inflation readings in recent months saw several policymakers also call for more rate hikes, amid concerns that monetary policy was not restrictive enough.

The minutes came just a day after Fed Chair Jerome Powell flagged some progress in bringing down inflation, but warned that the central bank needed more confidence to begin trimming rates.

Several other Fed officials echoed this notion in recent weeks. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.