By Shristi Achar A and Shashwat Chauhan
(Reuters) -Futures tracking Wall Street's main stock indexes gained on Thursday as the latest economic report boosted the prospect of interest rate cuts by the Federal Reserve later this year, ahead of more data that could help ascertain the timing of the cuts.
The S&P 500 and Nasdaq closed higher on Wednesday after data showed the U.S. services industry growth slowed further in March and as market participants assessed statements from Fed officials, including from Chair Jerome Powell.
While policymakers generally agreed that rates could fall later this year, Powell said this would happen only when they "have greater confidence that inflation is moving sustainably down" to the Fed's 2% target.
"What he (Powell) says matters, even if the inflation and labor market data has been surprising on the upside, the prospect of interest rate cuts are still in play," Kathleen Brooks, research director at XTB, wrote in a note.
Investors have been circumspect about the timing of the rate cuts, given mixed reports on the economic performance.
Equities fell earlier in the week following some strong economic reports, including manufacturing activity and job openings data that raised doubts about the three rate cuts widely priced in for the year.
Money markets are currently seeing a near 59% chance of at least a 25 basis point rate cut in June, according to the CME Group's (NASDAQ:CME) FedWatch tool.
Focus will also be on the comments from Fed policymakers, including Richmond Fed President Thomas Barkin, a voting member, and his Cleveland counterpart Loretta Mester, for further clues on the monetary policy.
On the data front, an initial jobless claims data for the week ended March 30 is due at 8:30 a.m. ET, before the key nonfarm payrolls data on Friday.
At 7:15 a.m. ET, Dow e-minis were up 110 points, or 0.28%, S&P 500 e-minis were up 18 points, or 0.34%, and Nasdaq 100 e-minis were up 84.25 points, or 0.46%.
Most megacap growth stocks edged up in premarket trading, with Meta Platforms, Amazon.com (NASDAQ:AMZN) and Nvidia up between 0.6% and 1.5%.
Levi Strauss jumped 10.9% after the apparel maker raised its annual profit forecast, citing savings from its recent cost-cutting measures and fewer discounts.
Most chipmakers also gained, with Micron Technology (NASDAQ:MU) up 1.0% after rising over 4% in the last session to close at a record high.
Online furniture retailer Wayfair advanced 4.1% after Evercore ISI upgraded its rating to "outperform" from "in-line".
Block fell 3.2% after Morgan Stanley (NYSE:MS) downgraded the payments fintech company to "underweight" from "equal-weight".