Wall St set for higher open as recent data bolsters rate cut hopes

  • Reuters
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Wall St set for higher open as recent data bolsters rate cut hopes
Credit: © Reuters.

By Shristi Achar A and Shashwat Chauhan

(Reuters) -Wall Street's main stock indexes were set for a higher open on Thursday as recent economic reports boosted the prospect of monetary policy easing later this year, while investors awaited policymakers to offer clues on the timing of the cuts.

The S&P 500 and Nasdaq closed higher on Wednesday after data showed the U.S. services industry growth slowed further in March, and statements from Federal Reserve officials, including from Chair Jerome Powell.

While policymakers generally agreed that rates could fall later this year, Powell said this would happen only when they "have greater confidence that inflation is moving sustainably down" to the Fed's 2% target.

"The Fed has been in the news lately, giving mixed signals about its intentions to cut rate or maybe even raise rates," said Peter Andersen, founder of Andersen Capital Management.

"With every new release, investors are hoping that the data will support a slowing economy and resultant Fed rate cuts."

Initial claims for state unemployment benefits rose to 221,000 for the week ended March 30 versus an estimate of 214,000 forecast by economists polled by Reuters, indicating a slowing labor market.

Equities fell earlier this week following some strong economic reports, including manufacturing activity and job openings data that raised doubts about the three rate cuts widely priced in for the year.

Money markets are currently seeing a near 63% chance of at least a 25 basis point rate cut in June, according to the CME Group's (NASDAQ: CME ) FedWatch tool.

Investors will be closely monitoring comments from Fed policymakers, including Richmond Fed President Thomas Barkin, a voting member, and his Cleveland counterpart Loretta Mester, for further clues on the monetary policy, before the key nonfarm payrolls data on Friday.

At 8:40 a.m. ET, S&P 500 E-minis were up 24.5 points, or 0.47%, Nasdaq 100 E-minis were up 113.75 points, or 0.62%, Dow E-minis were up 152 points, or 0.38%

Most megacap growth stocks edged up in premarket trading, with Meta Platforms (NASDAQ: META ), Amazon.com (NASDAQ: AMZN ) and Nvidia (NASDAQ: NVDA ) up between 0.8% and 1.7%.

Levi Strauss jumped 12.3% after the apparel maker raised its annual profit forecast, citing savings from its recent cost-cutting measures and fewer discounts.

Most chipmakers also gained, with Micron Technology (NASDAQ: MU ) up 1.1% after rising over 4% in the last session to close at a record high.

Online furniture retailer Wayfair advanced 4.1% after Evercore ISI upgraded its rating to "outperform" from "in-line".

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 1, 2024. REUTERS/Brendan McDermid

Block fell 3.4% after Morgan Stanley downgraded the payments fintech company to "underweight" from "equal-weight".

Lamb Weston dropped 9% after the frozen goods maker trimmed its full-year revenue and adjusted profit guidance.

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