By Bansari Mayur Kamdar and Johann M Cherian
(Reuters) - Wall Street futures fell on Wednesday as investors awaited minutes of the Federal Reserve's June meeting for clues on the central bank's monetary policy path, while Sino-U.S. tensions and weak economic data from Beijing dented sentiment.
Rate-sensitive megacap companies such as Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) slid 0.9% and 0.6%, respectively, in premarket trading. Netflix (NASDAQ:NFLX) gained 0.7% as Goldman Sachs (NYSE:GS) raised its rating and price target, bucking the downturn in technology and growth peers.
Investors are focused on the Fed minutes, expected to be released around 2 p.m. ET, as they resume trading after the July 4 Independence Day holiday.
Bets for a 25-basis-point rate hike in July stood at 83%, while they have priced in a 32% chance the U.S. central bank would deliver another hike by October, according to Refinitiv data. [IRPR]
"There is going to be a little bit of dissension among the ranks and the overall tone will be let's see how this plays out," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
"Stocks have accounted for another 25 basis point rate hike when the Fed meets later this month, but a lot of people are divided on whether or not there's going to be another rate hike (after July)."
Traders also awaited U.S. factory orders data, due at 10 a.m. ET, to gauge the impact of higher rates on the economy after a survey showed on Monday manufacturing slumped in June.
More economic data, including the non-farm payrolls report on Friday, is scheduled for release later this week.
Chip stocks such as Nvidia and Micron Technology (NASDAQ:MU) fell 0.9% and 0.7%, respectively, after China said it would control exports of some metals widely used in the semiconductor industry as tensions between Beijing and Washington rise over access to high-tech microchips.
Shares of Wolfspeed reversed early losses to gain 16.2% after the company signed a 10-year silicon carbide wafer supply agreement with Renesas Electronics Corp.
Denting risk sentiment, China's June services activity expanded at the slowest pace in five months, raising concerns about global economic recovery, a private-sector survey showed.
U.S. main indexes kicked off the third quarter with slim gains in a holiday-shortened session on Monday, led by Tesla (NASDAQ:TSLA) after the electric-vehicle company posted record second-quarter deliveries.
At 8:24 a.m. ET, Dow e-minis were down 170 points, or 0.49%, S&P 500 e-minis were down 23 points, or 0.51%, and Nasdaq 100 e-minis were down 94 points, or 0.61%.
Among other movers, United Parcel Service (NYSE:UPS) slid 2.1% after the Teamsters Union and the postal service operator accused each other of walking away from negotiations.
Moderna rose 1.2% after the drugmaker signed an agreement to work towards opportunities to research, develop and manufacture mRNA medicines in China.