May 28 2024: U.S. stock index futures edged higher on Tuesday at the start of a holiday-shortened week, with investors eyeing key inflation data for cues on interest rates.
At 06:15 ET (10:15 GMT), Dow Jones Futures rose 11 points (0.1%), S&P 500 Futures climbed 13 points (0.3%), and Nasdaq 100 Futures increased 75 points (0.4%).
After the Memorial Day holiday, trading volumes are expected to pick up as investors await crucial economic readings, including the Federal Reserve’s preferred inflation gauge.
PCE Inflation Data Due This Week The spotlight this week is on Friday’s release of the PCE price index data, the Federal Reserve’s favored measure of inflation. This data will influence the central bank’s outlook on interest rates, especially after recent warnings from Fed officials about persistent inflation delaying any rate cuts.
The CME FedWatch tool indicates a 50.7% probability that the Fed will keep rates steady, with a 43.6% chance of a 25 basis point rate cut. Friday’s PCE reading is expected to show some cooling in inflation, but it is anticipated to remain above the Fed’s 2% target.
Other key economic data this week include revised first-quarter GDP figures on Thursday and the Fed’s Beige Book on Wednesday. Investors will also hear from several Fed officials, including Governor Michelle Bowman, Cleveland Fed President Loretta Mester, Governor Lisa Cook, New York Fed President John Williams, and Atlanta Fed President Raphael Bostic.
May Promises Strong Gains The NASDAQ Composite ended last week at a record high, driven by gains in technology stocks like Nvidia (NASDAQ). Stocks are set to finish May on a strong note, boosted by better-than-expected quarterly earnings and cooler inflation data, which hinted at potential rate cuts.
The S&P 500 has advanced 5.3%, the Nasdaq Composite has rallied about 8%, and the Dow Jones Industrial Average has gained 3.3%, surpassing 40,000 for the first time this month.
While the quarterly earnings season is winding down, key reports are still expected from companies like Costco Wholesale (NASDAQ), Salesforce (NYSE), and Ulta Beauty (NASDAQ).
Crude Market Awaits OPEC+ Meeting Crude prices edged higher, rebounding from recent losses ahead of a meeting by major producers to decide future output levels.
At 06:15 ET, U.S. crude futures (WTI) rose 0.3% to $78.92 a barrel, and Brent crude traded 0.2% higher at $83.03 a barrel. Oil prices had risen over 1% on Monday in light trading due to holidays in the U.K. and the U.S., following a dip to the lowest levels since early February last week.
The focus is now on the OPEC+ meeting scheduled for June 2, where the cartel will decide whether to extend its current voluntary production cuts of 2.2 million barrels per day into the second half of the year.
