Apr 4 2024: U.S. stock index futures climbed on Thursday following a favorable economic report that bolstered expectations for interest rate cuts by the Federal Reserve. Investors are closely watching for further data and comments from policymakers to gauge the timing of potential rate adjustments.
The S&P 500 and Nasdaq closed higher on Wednesday as data indicated a slowdown in U.S. services industry growth for March. Additionally, statements from Fed officials, particularly Chair Jerome Powell, contributed to market optimism regarding potential rate cuts.
While Powell emphasized that rate cuts would occur only with greater confidence in sustained inflation reduction, investors remain attentive to his statements. Kathleen Brooks, research director at XTB, highlighted Powell’s influence on market sentiment despite surprising upside in inflation and labor market data.
Investor sentiment has been cautious due to mixed economic reports, particularly strong data such as manufacturing activity and job openings that raised doubts about the previously anticipated three rate cuts for the year.
Money markets currently indicate a nearly 59% probability of a 25 basis point rate cut in June, according to the CME Group’s FedWatch tool.
Market focus also centers on upcoming remarks from Fed policymakers like Richmond Fed President Thomas Barkin and Cleveland Fed President Loretta Mester, providing further insights into monetary policy.
In terms of data releases, investors are anticipating the initial jobless claims for the week ended March 30, scheduled for 8:30 a.m. ET, ahead of the crucial nonfarm payrolls data on Friday.
As of 5:35 a.m. ET, S&P 500 E-minis were up 16.5 points, Nasdaq 100 E-minis up 82.75 points, and Dow E-minis up 111 points.
