(Reuters) – U.S. stock index futures were broadly flat on Wednesday as investors remained on the sidelines ahead of preliminary revisions to U.S. payrolls data and the release of minutes from the Federal Reserve’s latest policy meeting.
The Bureau of Labor Statistics report is due at 10 a.m. ET. Most economists expect a downward revision, with Goldman Sachs expecting 600,000 to 1 million fewer jobs created between April 2023 and March 2024.
“A higher number would also not change much about the Federal Reserve’s easing policy, as the latest employment figures already point to a cooling labor market,” strategists at ING wrote in a morning note.
Minutes from the Fed’s July policy meeting are expected later in the day, ahead of Chairman Jerome Powell’s speech at the economic symposium in Jackson Hole on Friday.
“We expect the Fed chairman to continue to signal that a first rate cut is planned for September. However, there is a chance that investors will be disappointed by the comments, as they point to the persistence of inflation,” said Guy Stear, head of developed markets strategy at the Amundi Investment Institute.
According to CME’s FedWatch tool, financial markets are currently pricing in a 69.5% chance that the Fed will cut rates by 25 basis points in September, and a 30.5% chance of a very large 50 basis point cut.
Fed Governor Michelle Bowman said Tuesday she remains cautious about any shift in the central bank’s policy as she sees continued upside risks to inflation. She warned that overreacting to any single metric could jeopardize progress in the fight against inflation.
At 5:10 a.m. ET, the Dow E-minis were up 53 points, or 0.13%, and the S&P 500 E-minis were up 2.25 points, or 0.04%, while the Nasdaq 100 E-minis were down 7.75 points, or 0.04%.
Wall Street’s major indexes closed slightly lower on Tuesday, ending their recent winning streak.
Risk appetite in global equity markets returned last week after a sharp decline earlier this month, fueled by the likelihood of interest rate cuts by the US central bank in September. All three major US benchmarks are now at pre-selloff levels.
Among individual stocks, retail giant Target’s second-quarter earnings figures are set to be released before the opening bell.
U.S.-listed shares of Chinese e-commerce company JD.com fell 7.7% in pre-market trading after Reuters reported that Walmart, the company’s largest shareholder, has sold its entire stake in the business.
Keysight Technologies rose 11.1% after the electronics equipment maker beat third-quarter revenue and profit expectations.
Overall, trading volume in US stocks is low this month as many investors are away for the summer holidays.
(This story has been resubmitted to correct the day in paragraph 9 to Tuesday)
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Varun HK)
