(Reuters) -Futures tracking the S&P 500 and the Dow were subdued on Wednesday ahead of inflation reports and potentially weak earnings from major lenders later this week, while a dip in Treasury yields aided gains in the tech-laden Nasdaq.
Equities have remained range-bound since the turn of the year, as investors reassess their expectations of the pace of monetary policy easing following contrasting economic data and mixed signals from Federal Reserve officials.
After leading last year’s rally on optimism around early interest rate cuts, megacaps stocks have gyrated so far in 2024.
“Early optimism seen throughout financial markets may be difficult to maintain given the uncertainty as we head into a crucial second half of the week,” said Joshua Mahony, chief market analyst at Scope Markets.
Investors’ focus now remains squarely on the December consumer and producer inflation reports due on Thursday and Friday, respectively. A slew of government and corporate bond issuance are also due this week.
“With both headline and core CPI unlikely to hit 2% by March, market expectations around a potential rate cut at that point looks to be built on the high likeliness of a return to target for the Fed’s favoured core PCE metric,” said Mahony.
Market participants have scaled back expectations for at least a 25-basis-point rate cut in March, and currently see a 64% chance, down from around 86% in the last week of 2023, as per the CME FedWatch Tool.
On Friday, banking giants JPMorgan Chase (NYSE:JPM), Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits, as they set money aside to cover souring loans and paid more to depositors. Some analysts fear the earnings season may not produce the results that justify the run up in stock valuations into the end of last year.
At 7:12 a.m. ET, Dow e-minis were down 28 points, or 0.07%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were up 30 points, or 0.18%.
Amazon.com (NASDAQ:AMZN), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) rose between 0.4% and 0.8% in premarket trading, as U.S. Treasury yields ticked lower, with those on the benchmark 10-year note slipping to 3.99%. [US/]
Chip stocks Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) also gained between 0.5% and 1.1% as TSMC, the world’s largest contract chipmaker, beat fourth-quarter revenue expectations.
Crypto stocks including Coinbase (NASDAQ:COIN), Bitfarms and Riot Platforms (NASDAQ:RIOT) fell between 2.2% and 3%, as prices of the world’s most valued cryptocurrency, Bitcoin, dipped after the U.S. securities regulator said a fake social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds.
Boeing (NYSE:BA) inched up 0.3%, recovering from a 9.3% tumble in the last two sessions. CEO Dave Calhoun acknowledged errors by the U.S. planemaker as more than 170 jets remained grounded for a fourth day.
Dow Inc (NYSE:DOW) slipped 0.7% after Deutsche Bank downgraded the chemicals firm to “hold” from “buy”.
Intuitive Surgical (NASDAQ:ISRG) climbed 5.1% after the medical device maker’s preliminary fourth-quarter revenue beat estimates.
Source: Economy - investing.com
