S&P 500, Nasdaq poised for higher open as investors await inflation data

By Johann M Cherian and Lisa Pauline Mattackal

(Reuters) – The S&P 500 and Nasdaq were on track to open higher on Tuesday after a holiday-long weekend, as investors awaited key inflation data later in the week that could influence expectations regarding the policy trajectory of the Federal Reserve.

The possibility that the world’s most influential central bank could initiate interest rate cuts this year has propelled Wall Street into a record rise since late 2023, the tech-heavy Nasdaq and the benchmark S&P 500 recording their fifth consecutive week of gains. Friday.

However, expectations for when the first rate cut might come have wavered as Fed policymakers continue to dismiss the imminent need for such a cut, given data reflecting a still resilient economy and inflation persistent.

Market attention now turns to the US Personal Consumption Expenditures Price Index report for April, due later in the week. The Fed’s preferred inflation barometer is expected to remain stable on a monthly basis.

Traders estimate there is a 51.2% chance that the first rate cut of at least 25 basis points could be implemented in September, according to the CME FedWatch tool.

“The Fed is still in play…real interest rates need to come down. There is a lot of sourness around the prices of things like food and energy. Overall, inflation tends to fall and slowing inflation will give the Fed a hedge for lower rates,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.

U.S. exchanges are moving to shorter settlement on Tuesday, which regulators hope will reduce risks and improve efficiency in the world’s largest financial markets but is expected to temporarily increase failed trades for investors.

Among other data, the U.S. consumer confidence report for May is due at 10 a.m. ET, while the second estimate of first-quarter gross domestic product and the Fed’s Beige Book, along with remarks from a number of central bankers, are expected later this week. .

Minneapolis Fed President Neel Kashkari said in an interview with CNBC that the U.S. central bank should wait before cutting interest rates, adding that it could even raise rates if inflation fails. to decline further.

As of 8:35 a.m. ET, the Dow e-minis were down 32 points, or 0.08%, the S&P 500 e-minis were up 8 points, or 0.15%, and the e-minis of the Nasdaq 100 were up 45.5 points, or 0.24%.

UBS Global Research raised its year-end target for the benchmark index to 5,600 from a previous forecast of 5,400, marking the highest forecast among major brokerages.

Nasdaq futures rose, led by a 3% rise in AI darling Nvidia, after closing at a record high on Friday.

Apple jumped 1.7% after iPhone sales in China jumped 52% in April from a year earlier, according to Reuters calculations based on industry data. Apple supplier Qualcomm also rose 2.9%.

Meme GameStop stock soared 22% after the video game retailer announced late Friday that it had raised $933 million by selling 45 million shares, in an “at-the-market” offering.

Norwegian Cruise Line added 3.4% after brokerage Mizuho upgraded the stock to “buy” from “neutral.”

(Reporting by Johann M Cherian, Lisa Pauline Mattackal and Shubham Batra in Bengaluru; editing by Pooja Desai)

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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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