NEW YORK, 30th May, 2024 (WAM) -- Wall Street futures softened on Thursday, as uncertainty around how long the Federal Reserve could keep interest rates elevated weighed on investor sentiment ahead of crucial data that could help decode the state of the U.S. economy, Reuters reported.
Megacaps such as Alphabet, Microsoft and Nvidia slipped between 0.4 percent and 0.8 percent in trading before the bell, extending losses from Wednesday's session as the yield on Treasury notes hovered above 4.5 percent for the second day across the board – the highest since the first week of May.
Uncertainty over monetary policy, combined with heavy new Treasury issuance, has pushed bond yields higher and pressured stocks. Rising bond yields typically reflect expectations for higher interest rates, which in turn means costlier financing and smaller profit margins for companies.
Investors await the second estimate for first-quarter gross domestic product, expected at 08:30 ET (16.30 UAE time). According to a Reuters poll, the world's largest economy expanded by 1.3 percent, slightly less than the previously thought 1.6 percent.
Also on tap is the jobless claims data, expected to show that the number of Americans filing for State unemployment benefits stood at 218,000, from 215,000 recorded the previous week.
The benchmark S&P 500 index is on track for its biggest weekly drop in six, while the blue-chip Dow closed at a four-week low on Wednesday.
Markets now expect the Fed's first 25-basis-point rate cut only in November or December, according to the CME Group's FedWatch Tool.
April's personal consumption expenditure report – the Fed's preferred inflation gauge, due on Friday – could also sway bets on the timing of the central bank's first cut.
Hawkish comments from policymakers have also dampened risk sentiment, and traders will assess remarks from New York Fed President John Williams and Dallas Fed President Lorie Logan later in the day.
At 07:08 ET (15.00 UAE time), Dow e-minis were down 329 points, or 0.85 percent, S&P 500 e-minis were down 20.5 points, or 0.39 percent, and Nasdaq 100 e-minis were down 56 points, or 0.30 percent.