Stock Futures Rise Again After Market Rally Paused
U.S. stock futures pointed higher early Wednesday as investors looked ahead to the Federal Reserve’s favored inflation gauge and the end of a strong first quarter.
Dow Jones Industrial Average futures rose 0.3% in early trading, while S&P 500 futures were up 0.2% and Nasdaq 100 futures also edged 0.2% higher ahead of the open.
All three major indexes closed lower Tuesday after selling off in the final hour of trading. The Nasdaq Composite had been on course for another record high–its sixth of the year–before the dip late in the day. It marked three consecutive days of losses for the Dow and S&P 500.
Deutsche Bank strategist Jim Reid said the late move lower was “seemingly driven by quarter-end positioning.” The holiday-shortened week means Thursday is the final trading day of the quarter. Markets are closed Friday in observance of Good Friday.
AI chip maker Nvidia was one of the stocks leading the markets lower late in the day Tuesday, as it fell 2.5% to snap a six-day winning streak.
Friday is still shaping up to be the main event of the week for investors, despite stock and bond markets being closed. That’s because the latest core personal consumption expenditure (PCE) index is due to be released–the metric most closely watched by the Fed to monitor the progress of its fight against inflation.
A June rate cut is still seen as the most likely scenario by traders, who are pricing in a 69% chance of it happening, according to CME’s FedWatch tool.
Inflation needs to move closer to the central bank’s 2% target to cement a June cut, though, and economists expect core PCE to rise 2.8% on an annual basis February–unmoved from January. Anything hotter than that could shift rate-cut expectations toward July.