(Reuters) – U.S. stock index futures edged higher on Wednesday ahead of the holiday season as investors braced for a jobs report among a slew of economic data, as well as the minutes of the Federal Reserve’s June policy meeting.
The stock market will close early Wednesday and remain closed Thursday due to U.S. Independence Day, keeping trading volumes low throughout the week.
ADP national employment figures and weekly jobless claims are due before the open, a day after data showed a rise in U.S. job openings and layoffs in May. The figures also come ahead of closely watched nonfarm payrolls data on Friday.
“We still think we should see a slowdown in employment numbers in the coming months. If employment slows and the disinflation trend is intact, the Fed will deliver a rate cut in September,” wrote Mohit Kumar, Jefferies’ chief European economist.
Market participants estimate a 65% chance of a first rate cut in September, and about two cuts by year-end, according to FedWatch data from LSEG.
Other data to watch include factory orders and services PMIs after markets open, as well as the minutes of the Fed’s June meeting at 2 p.m. ET. New York Fed President John Williams is also scheduled to speak later in the day.
Gains in Tesla and mega-cap stocks helped the Nasdaq and S&P 500 close at record highs on Tuesday, a day that also saw Fed Chairman Jerome Powell acknowledge the “disinflationary path” while stressing the need for more data before cutting interest rates.
“A 25 basis point cut may not make much difference to the economy, but if the Fed is proactive, then no one can blame Powell for not doing his job by keeping rates high longer and causing a slowdown,” Jefferies’ Kumar added.
Tesla rose 2.7% before the market opened after hitting its highest level since January on Tuesday, following a smaller-than-expected drop in vehicle deliveries in the second quarter.
Nvidia fell 1.4%, in a recent choppy run for the AI chip leader after its stunning gains since 2023, even as other semiconductor stocks held firm on the day.
While the S&P 500 has surged more than 15% in the first half of 2024, largely driven by strong momentum among leading tech stocks, the benchmark’s equal-weight counterpart is up just 5%, signaling a lack of broad-based market strength.
As of 4:59 a.m. ET, Dow e-minis were up 40 points, or 0.1%, S&P 500 e-minis were up 0.75 points, or 0.01%, and Nasdaq 100 e-minis were up 11.5 points, or 0.06%.
Among other stocks moving before the market open, Paramount Global jumped 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)
