Wall St eyes higher open on easing bond yields, inflation data on tap

  • Reuters
  • Stock Market News
Wall St eyes higher open on easing bond yields, inflation data on tap
Credit: © Reuters

By Shashwat Chauhan and Shristi Achar A

(Reuters) -U.S. stocks were poised for a higher open on Tuesday supported by retreating Treasury yields, while investors awaited a key inflation print later in the week that could help shape the Federal Reserve's stance on rate cuts this year.

All three major indexes had a flat finish on Monday, as a rise in Treasury yields after a blowout jobs report last week kept gains in check.

The focus will be on the March reading of the U.S. Consumer Price Index (CPI), due on Wednesday, that is expected to show a rise in headline inflation to 3.4% year-on-year, from 3.2% in February.

The core figure, which excludes volatile components such as food and energy, is expected to ease to 3.7% year-on-year, versus 3.8% in February.

"I would not be surprised, given the underlying strength in the economy, that it (CPI) comes in a little warmer than expected, but that doesn't seem to be particularly worrisome for investors," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"The overarching theme is that it will cool and that the Federal Reserve will eventually be able to cut interest rates."

Amid signs of a robust U.S. economy, investors have been scaling back expectations for how much the Fed will cut interest rates this year. Current bets of around a 60-basis-point easing are the lowest since October, according to LSEG data, compared to about 150 bps priced in at the start of 2024.

Traders see a nearly 50% chance of an at-least 25 bps cut in June, according to the CME's FedWatch Tool, down from 64% last week.

Cushioning equities, the yield on the benchmark 10-year Treasury note fell, easing from the November highs it scaled in the previous session. It was last standing at 4.3857%. [US/]

Adding to gains, Alphabet (NASDAQ: GOOGL ) rose 1.1% in premarket trading after Google revealed the details of a new version of its data center artificial intelligence chips.

Minutes from the Fed's March meeting - where it stuck to its guidance of three rate cuts this year - are due later in the week and could be key to gauging where the central bank stands on policy easing.

Among other market drivers is the first-quarter earnings season, with the spotlight on banking giants JPMorgan Chase (NYSE: JPM ), Citigroup and Wells Fargo (NYSE: WFC ), which are scheduled to report towards the end of the week.

At 8:32 a.m. ET, Dow e-minis were up 30 points, or 0.08%, S&P 500 e-minis were up 11.5 points, or 0.22%, and Nasdaq 100 e-minis were up 58.75 points, or 0.32%.

© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 4, 2024. REUTERS/Andrew Kelly/FILE PHOTO

Cryptocurrency and blockchain-related stocks declined in premarket trading, tracking falling bitcoin prices. Exchange operator Coinbase (NASDAQ: COIN ) Global, crypto miner Marathon Digital (NASDAQ: MARA ) and software company MicroStrategy (NASDAQ: MSTR ) dipped between 0.9% and 1.1%.

U.S.-listed shares of Tilray Brands slumped 16.6% after the cannabis firm said it no longer expects to generate adjusted positive free cash flow for 2024 due to delayed cash collections on various asset sales.

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