(Reuters) – U.S. stock index futures were slightly higher in pre-holiday trading on Wednesday as investors prepared for the jobs report among a series of economic data along with minutes from the Federal Reserve’s June policy meeting.
The stock market is set to close early on Wednesday and remain closed on Thursday for US Independence Day, keeping trading volumes thin throughout the week.
National employment reports and weekly jobless claims are due before the opening bell, a day after data showed U.S. job openings rose and layoffs surged in May. It also comes ahead of closely watched nonfarm payrolls data on Friday.
“We remain of the view that we will see a slowdown in employment data over the coming months,” wrote Mohit Kumar, chief European economist at Jefferies. “If employment slows and the contractionary trend remains intact, the Fed will cut rates in September.”
Market participants see a 65% chance of a first rate cut in September, and about two cuts by the end of the year, according to LSEG’s FedWatch data.
Other data points on the watchlist include factory orders and services PMIs after markets open, along with minutes from the Federal Reserve’s June policy meeting at 2 p.m. ET. New York Fed President John Williams is also scheduled to take the stage during the day.
Gains in Tesla and other big-cap stocks helped the Nasdaq and S&P 500 close at record highs on Tuesday, a day that also saw Federal Reserve Chairman Jerome Powell acknowledge a “distractionary path” while also signaling that more data is needed before cutting interest rates.
“A 25bp rate cut may not make a big difference to the economy, but if the Fed is proactive, no one can blame Powell for not doing his job by keeping rates higher for longer and engineering a slowdown,” Kumar of Jefferies added.
Tesla shares rose 2.7% before the market opened after hitting their highest level since January on Tuesday following a smaller-than-expected drop in vehicle deliveries in the second quarter.
Nvidia shares fell 1.4%, in a recent rollercoaster ride for the AI chipmaker after its stunning gains since 2023, even as other semiconductor stocks held ground on the day.
While the S&P 500 has jumped more than 15% in the first half of 2024, largely driven by high-momentum, blue-chip technology stocks, the equal-weighted benchmark is up just 5%, suggesting a lack of broad-based market strength.
At 4:59 a.m. ET, the Dow e-minis were up 40 points, or 0.1%, the S&P 500 e-minis were up 0.75 points, or 0.01%, and the Nasdaq 100 e-minis were up 11.5 points, or 0.06%.
Among other pre-market moves, Paramount Global jumped 6.5% after Shari Redstone’s National Amusements reached a preliminary agreement to sell its controlling stake in the media giant to David Ellison’s Skydance Media.
(Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
