© Reuters. FILE PHOTO: Traders work at the New York Stock Exchange (NYSE) in New York City, US, June 29, 2023. REUTERS/Brendan McDiarmid/File Photo
(Reuters) – US stock index futures rose on Tuesday ahead of key inflation data that could support a faster-than-expected end to the Federal Reserve’s hawkish stance.
After last week’s jobs report indicated a still resilient US economy, investors have stepped up their bets that the central bank will raise borrowing costs later in July by 25 basis points.
All eyes now turn to inflation data released on Wednesday which is expected to show consumer prices fell year-on-year in June, which could influence bets for another rate hike after the July meeting.
Market participants will also keep a close tab on comments by a number of central bank policymakers who are expected to speak during the week.
Major US stock indexes closed a choppy session slightly higher on Monday after Federal Reserve officials indicated that the US central bank is nearing the end of its monetary tightening cycle.
“Feds have risen that we are nearing the end of the current monetary policy tightening cycle after several Fed members suggested that interest rates are nearing their peak,” said Joshua Warner, market analyst at City Index.
The yield on 2-year US Treasury notes, which moves in line with short-term interest rate expectations, fell more than a 16-year high, and the reversal between the 2-year and 10-year portion of the yield. The curve narrowed further ahead of the long-awaited data.
In pre-market trading, most of the huge growth stocks like Tesla (NASDAQ:), Amazon.com (NASDAQ:) and Alphabet (NASDAQ:) were up between 0.2% and 0.5%, recovering from Monday’s declines after Nasdaq Inc said It will rebalance in order to address the “overemphasis” of the standard.
At 6:10 AM ET, it was up 24 points, or 0.07%, up 5 points, or 0.11%, and up 25 points, or 0.16%.
Most of the big banks were also higher, with JPMorgan Chase (NYSE: NYSE) rising 1.3% after Jefferies upgraded the stock to “buy” before earnings later this week.
Zions Bancorp and Truist Financial (NYSE::) fell more than 1% in light trading after Jefferies downgraded the banks to “hold.”