Oct 2, 2023: Wall Street index futures were subdued on Monday ahead of comments from Federal Reserve officials including Chair Jerome Powell, while investors looked forward to more economic data this week to gauge the central bank’s interest-rate outlook.
Powell and Philadelphia Fed President Patrick Hasker will speak at a roundtable discussion, due 11 a.m. ET, with local employers and small business owners on efforts to grow the economy.
Later in the day, Cleveland Fed President Loretta Mester will speak on the outlook for the U.S. economy.
All three major stock indexes ended the July-September period lower to log their first quarterly decline in 2023 as investors grappled with the prospects of interest rates remaining higher for longer, with a recent rally in crude prices fueling inflation concerns.
A slew of economic data including U.S. manufacturing activity and the crucial monthly jobs reports at the end of the week is on investors’ radar for more clues on the Fed’s interest-rate path.
“Last week’s inflation data suggested that while the Fed has made considerable progress against untoward levels of inflation, it still has more work to do before it can declare an end to the current rate hike cycle or even initiate an extended pause,” John Stoltzfus, CIO at Oppenheimer Asset Management wrote in a note.
Traders’ bets on the benchmark rate remaining unchanged in November and December stood at nearly 74% and 55%, respectively, according to CME’s FedWatch tool, while a 25-basis-point rate cut is being priced in as early as March.
Meanwhile, the Congress on Saturday passed a stopgap funding bill with overwhelming Democratic support after Republican House Speaker Kevin McCarthy backed down from an earlier demand by his party’s hardliners for a partisan bill.
Yields on the 10-year Treasury note edged higher on Monday, with the 2-year note, which best reflects interest rate expectations, still above 5%.
At 6:59 a.m. ET, Dow e-minis were down 12 points, or 0.04%, S&P 500 e-minis were up 0.5 points, or 0.01%, and Nasdaq 100 e-minis were up 25 points, or 0.17%.
Megacap stocks including Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) rose between 0.1% and 0.5% in premarket trading.
Crypto-linked stocks including Riot Platforms, Marathon Digital and U.S.-listed shares of Hut 8 Mining were up between 7.4% and 8.7% after bitcoin hit near two-month highs.
Shares of Coinbase (NASDAQ:COIN) climbed 5.4% after the cryptocurrency exchange got the Singapore payments licence from the city-state’s central bank.
Cybersecurity firm Zscaler (NASDAQ:ZS) jumped 3.1%, while cloud security platform Datadog (NASDAQ:DDOG) advanced 2.4% after brokerage Piper Sandler upgraded the stocks to “overweight” from “neutral”.
Nvidia (NASDAQ:NVDA) rose 1.2% on a report saying Goldman Sachs had upgraded the chipmaker’s stock to “conviction buy”.
Rivian (NASDAQ:RIVN) Automotive advanced 4.2% after Evercore ISI raised the EV maker’s stock to “outperform” from “in line”.
Source Courtesy: Reuters