Wall St set for higher open on gains in tech, growth shares; jobs data eyed

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023. REUTERS/Brendan McDermid

By Ankika Biswas and Amruta Khandekar

(Reuters) -Wall Street's main indexes were set to open higher on Tuesday on gains in technology and growth stocks, while investors awaited key economic data that could decide the U.S. Federal Reserve's monetary tightening path.

Tesla (NASDAQ:TSLA) Inc edged 0.8% higher in premarket trading as sales of its China-made electric vehicles rose in March. Its shares were set to bounce back from 6% declines on Monday following data on March-quarter deliveries.

Other major growth names such as Microsoft Corp (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) Inc and Amazon.com Inc (NASDAQ:AMZN) climbed between 0.5% and 1%, helping futures tracking the tech-heavy Nasdaq outperform peers.

Meanwhile, rising oil prices following the OPEC+ group's output cuts have renewed fears about inflation, denting hopes of an end to aggressive interest rate hikes despite recent signs of cooling prices and turbulence in the banking sector.

"We think that it (soaring oil prices) will cause inflation to remain sticky and the Fed definitely wants to ensure that they have a stranglehold on inflation before they take their foot off the brake," said Sam Stovall, chief investment strategist of CFRA Research in New York.

Strong gains in energy firms helped the S&P 500 close higher on Monday, with the energy sub-index clocking its strongest one-day gain in six months.

Energy companies Chevron Corp (NYSE:CVX), Exxon Mobil Corp (NYSE:XOM) and Occidental Petroleum Corp (NYSE:OXY) rose between 0.4% and 1% before the bell on Tuesday.

Bets by traders of a 25-basis point rate hike in May stood at 64.3%, with odds of a pause at 35.7%, according to CME Group's (NASDAQ:CME) Fedwatch tool.

Later in the day, investors will watch out for data on U.S. job openings that is likely to show a fall in February, as they attempt to assess if the aggressive rate hikes have cooled the economy to the Fed's satisfaction.

A separate report expected is likely to show factory orders fell 0.5% in February and will come on the heels of surveys showing weak U.S. manufacturing activity in March.

"Factory orders are expected to show a decline. That would imply that the war against inflation is working," said Stovall.

Remarks by Fed Board Governor Lisa Cook, Fed Boston President Susan Collins and Fed Cleveland President Loretta Mester will also be parsed for any clues on the rate-hike trajectory.

The S&P 500 and the tech-heavy Nasdaq have gained 7.4% and 16.5% so far in 2023, steadying from their worst annual drop last year since the 2008 financial crisis, on expectations that the Fed may go easy with its policy tightening.

At 7:59 a.m. ET, Dow e-minis were up 32 points, or 0.09%, S&P 500 e-minis were up 11.75 points, or 0.28%, and Nasdaq 100 e-minis were up 53.25 points, or 0.40%.

Among stocks, Virgin Orbit Holdings Inc tanked 23.7% after the satellite launch company filed for Chapter 11 bankruptcy on failing to secure long-term funding.

AMC Entertainment Holdings Inc shares tumbled 26.8% after the movie theater chain said it agreed to settle litigation and proceed with converting its preferred stock into common shares.