(Reuters) – U.S. stock index futures rose slightly in pre-holiday trading on Wednesday as investors prepared for an employment report alongside a raft of economic data, along with minutes from the Federal Reserve’s June policy meeting.
The stock market will close early on Wednesday and remain closed on Thursday for the U.S. Independence Day, meaning trading volume will be limited throughout the week.
ADP National Employment and weekly jobless claims reports are due before the opening bell, a day after data showed U.S. job openings rose and layoffs increased in May. This also comes ahead of closely watched non-farm payrolls data due out Friday.
“We believe we will see a slowdown in employment data in the coming months. If employment slows and the disinflation trend is intact, the Fed will cut rates in September,” wrote Mohit Kumar, chief European economist at Jefferies.
Market participants expect the first rate cut to be 65% in September and two more rate cuts to occur by the end of the year, according to data from LSEG’s FedWatch.
Other data points on the watchlist include factory orders and services PMIs after markets open, along with minutes from the Fed’s June meeting at 2 p.m. ET. New York Fed President John Williams is also scheduled to take the stage during the day.
Surges in Tesla and mega-cap stocks helped the Nasdaq and S&P 500 close at record highs on Tuesday. On the day, Fed Chairman Jerome Powell also acknowledged a “disinflationary course” but stressed that more data is needed before cutting interest rates.
“A 25 basis point cut may not make much difference to the economy, but if the Fed is proactive, no one can blame Powell for not doing his job by keeping rates higher for longer and bringing about a slowdown,” Jefferies’ Kumar said.
Tesla rose 2.7% in premarket after hitting its highest level since January on Tuesday, following a smaller-than-expected decline in second-quarter vehicle deliveries.
Nvidia fell 1.4%, in a recent erratic run for the AI chip leader after stunning gains since 2023, even as other semiconductor stocks held their positions on the day.
While the S&P 500 is up more than 15% in the first half of 2024, largely thanks to top tech-related stocks with high momentum, the benchmark index’s equal-weight counterpart is up just 5%, suggesting broad market strength is lacking.
At 4:59 a.m. ET, the Dow e-minis were up 40 points, or 0.1%, the S&P 500 e-minis were up 0.75 points, or 0.01%, and the Nasdaq 100 e-minis were up 11.5 points, or 0.06%.
Among the other premarket gainers was Paramount Global, which rose 6.5% after Shari Redstone’s National Amusements reached a preliminary agreement to sell its majority stake in the media giant to David Ellison’s Skydance Media.
(Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
