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Futures lackluster with inflation data, Fed Chair Powell speech on tap

Published 14/05/2024, 07:42 pm
© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 8, 2024.  REUTERS/Brendan McDermid/File Photo
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(Reuters) - U.S. stock index futures were little changed on Tuesday as investors waited for producer prices data for cues on inflation in the world's largest economy and ahead of Federal Reserve Chair Jerome Powell speech later in the day.

Producer price index (PPI) for final demand is expected to have edged up 0.3% last month, according to economists polled by Reuters, after increasing by an unrevised 0.2% in March.

The PPI is expected to increase by 2.2% in the 12 months through April, after adding 2.1% in the prior month.

Sticky inflation and persistent labor market strength have prompted financial markets and most economists to push back expectations for an initial Fed interest rate cut.

Traders now see a 49.6% chance that the central bank will ease rates by 25 basis points in September, according to the CME FedWatch Tool, from 44% last month. That compared with expectations for first rate cut as early as March at the start of the year.

Still, stocks have rallied so far this year, with all three major U.S. indexes hovering near fresh record highs, underpinned by better-than-expected first-quarter earnings and hopes that the Fed will cut rates some time this year.

Focus will be more on Wednesday's consumer price figures to help assess whether the upside surprises in the first quarter were a blip or a worrying trend.

Meanwhile, Fed Chair Jerome Powell is due to speak at 1400 GMT.

At 05:00 a.m. ET, Dow e-minis were up 11 points, or 0.03%, S&P 500 e-minis were up 1 points, or 0.02%, and Nasdaq 100 e-minis were up 7.75 points, or 0.04%.

The U.S.-listed shares of Alibaba (NYSE:BABA) added 0.7% in premarket trading ahead of results.

Meanwhile, U.S. President Joe Biden unveiled a bundle of steep tariff increases on an array of Chinese imports including electric vehicles, computer chips and medical products.

U.S.-listed shares of Chinese EV makers Li Auto (NASDAQ:LI) and Xpeng (NYSE:XPEV) slid more than 2% each.

© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 8, 2024.  REUTERS/Brendan McDermid/File Photo

GameStop (NYSE:GME) jumped 39.2%, set to extend its rally after flag bearer Roaring Kitty posted on X.com for the first time in three years.

Other 2021 meme rally participants and highly shorted stocks such as AMC Entertainment and Koss Corp rose 38.2% and 12.6%, respectively.

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