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Wall St set for higher open on peak interest rate bets

Published 30/11/2023, 10:28 pm
© Reuters. FILE PHOTO: The New York Stock Exchange (NYSE) in New York City, U.S., February 24, 2022.   REUTERS/Caitlin Ochs/File Photo
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By Shristi Achar A and Amruta Khandekar

(Reuters) -Wall Street's main indexes were set to gain at open on Thursday as the latest reading of a key inflation report supported investor hopes that U.S. interest rates have peaked.

The personal consumption expenditure (PCE) index- the Fed's preferred inflation gauge- showed inflation remained unchanged in October on a monthly basis, against economists' projections of a 0.1% increase.

Core inflation, which excludes volatile food and energy prices, rose 0.2% on a monthly basis, in-line with estimates.

Traders held their bets that the Federal Reserve will keep interest rates steady for three more meetings before starting to cut them in May.

"What we've seen in the PCE data today is just further evidence that inflation continues to move lower and it's been a trend that we've seen for most of this year," said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP) in Troy, Michigan.

"It confirms that the Fed is likely to stay on the sidelines next month, when they meet for their last policy meeting of the year."

The three main indexes are on course for their strongest November since 2020, with the S&P 500 and the tech-heavy Nasdaq also poised for their biggest monthly percentage gain since July 2022.

Signs of cooling price pressures, a dovish pivot in comments from some Fed officials and strong quarterly earnings have all driven equities to rally in the last couple of weeks.

Markets also assessed the weekly jobless claims, which showed initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 218,000 for the week ended Nov. 25, hinting at a softening labor market.

The Chicago purchasing managers' index (PMI) for November is due later in the day.

Dow component Salesforce jumped 8.7% before the bell as the cloud-based software firm raised its annual profit forecast and third-quarter results beat.

At 9:00 a.m. ET, Dow e-minis were up 194 points, or 0.55%, S&P 500 e-minis were up 9.25 points, or 0.2%, and Nasdaq 100 e-minis were up 20.75 points, or 0.13%.

Among other stocks, Ford Motor (NYSE:F) Co rose 1.1% premarket following the automaker's full-year outlook for operating results.

© Reuters. FILE PHOTO: The New York Stock Exchange (NYSE) in New York City, U.S., February 24, 2022.   REUTERS/Caitlin Ochs/File Photo

Data cloud company Snowflake added 6.8% after it forecast fourth-quarter product revenue above Street estimates on artificial intelligence driven demand.

Pinterest and Snap Inc (NYSE:SNAP) rose 2.6% and 3.0% respectively, after Jefferies upgraded the social media firms to "buy" from "hold."

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