By Shubham Batra and Amruta Khandekar
(Reuters) -U.S. stocks were set to open flat on Wednesday, in the absence of any strong cues to keep up the optimism around the prospects of early rate cuts that pushed the S&P 500 closer to its all-time high in the previous session.
Premarket trading volumes were low, with most participants away on year-end holidays and only a weekly jobless claims data expected on Thursday.
Stocks extended gains on Tuesday in light trading, a day after the Christmas holiday, with the benchmark index about 0.5% away from its highest close since January 2022. It is now on track to post its biggest quarterly gain in three years.
Closing above the 4,796.56 level would confirm the S&P 500 has been in a bull market since touching the bear market nadir, the closing low reached in October 2022."Traditionally, between Christmas and New Year's, there isn't much activity, but I do notice that a dominant emotion of optimism seems to be pervasive this week," said Peter Andersen, founder of Andersen Capital Management in Boston.
"I do think the Fed will not raise rates in 2024 and that the economy will continue to show a successful so-called soft landing. That should provide a solid foundation for a continued rally in 2024."
An eight-week rally in the main indexes went into overdrive two weeks ago after the Fed signaled the end of its rate hike cycle and opened the door to potential rate cuts in 2024.
Traders' bets that the Fed will deliver a rate cut in March currently stand at 84%, up from about 21% at the end of November, according to the CME Group's (NASDAQ:CME) FedWatch tool.
At 8:14 a.m. ET, Dow e-minis were down 16 points, or 0.04%, S&P 500 e-minis were up 1.25 points, or 0.03%, and Nasdaq 100 e-minis were up 12.25 points, or 0.07%.
Among individual movers, shares of Bit Digital were up 5.2% in premarket trading as the U.S.-based bitcoin miner plans to double its mining operating fleet to about 6.0 ether per second in 2024.
Coherus BioSciences rose 34.9% after the company said the U.S. FDA has approved its drug delivery device for its infection-fighting treatment.
First Wave BioPharma shares more than doubled in value after the drug developer agreed to sell its inflammatory bowel disease drug to an undisclosed company.