Stock market today: US futures slip away from records as focus turns to Fed

Stock market today: US futures slip away from records as focus turns to Fed

US stock futures drifted lower on Tuesday, setting the stage for a retreat from record highs as investors waited for the start of a Federal Reserve meeting that should signpost the path of interest rates.

Futures on the S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) both fell roughly 0.3% on the heels of notching all-time closing highs. Dow Jones Industrial Average futures (YM=F) dropped 0.4%.

Stocks have managed to make headway amid market uncertainty about an economy that may be too hot or too cold for comfort. A string of inconclusive data has fueled skepticism about the likelihood of three rate cuts in 2024, as envisaged by the Fed in March. Many investors now predict just one reduction before the year’s end.

The two-day Fed policy meeting that kicks off Tuesday is heavily expected to end with borrowing costs kept at their two-decade high. Investors will still watch out for hints on when a shift to cuts will come, with September or November in the frame.

Read more: How does the labor market affect inflation?

Investors calculating the rate-reduction odds are also looking ahead to May consumer price data due out on Wednesday, given its crucial role in the Fed’s deliberations.

Meanwhile, Apple (AAPL) shares lingered in the red after losses followed the iPhone maker’s big AI debut. On the flipside, Eli Lilly (LLY) shares popped after the drugmaker’s early-stage Alzheimer’s treatment got unanimous backing from a panel of FDA advisers.

Live1 update

  • Diverging views on Apple after AI event

    There isn’t a clear consensus on Apple (AAPL) shares after its hype-filled AI event yesterday.

    The Street is giving Apple a high-five on the technology itself, but what is unclear is if it’s enough to spur a stock price-moving iPhone upgrade cycle.

    JP Morgan on the event:

    “We continue to expect the start of a device upgrade cycle for iPhones later this fall (largely FY25 for Apple) with the upgrade cycle likely peaking with the launch of the iPhone 17 in 2025 (largely FY26 volumes for Apple).”

    KeyBanc on the event:

    “We believe WWDC is a sell-the-news event where the bulls’ view, centered around an “iPhone Super Cycle” triggered by Apple intelligence (AI) being integrated into Apple’s products, will likely be seen as disappointing. While WWDC introduces new software features across iOS, iPad OS, macOS, and visionOS that are often useful, they are not compelling, in our view, for the average consumer to purchase a new device.”

    The stock is down slightly in premarket trading.

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