NEW YORK, 5th June, 2024 (WAM) -- U.S. stock index futures edged higher on Wednesday as investors strengthened bets on an earlier start to rate cuts by the Federal Reserve this year than previously expected, after a string of economic data pointed to slowing economic growth, Reuters reported.
Wall Street ended Tuesday's session slightly higher, paring some losses, with rate-sensitive real estate stocks leading sector gains.
That came on the heels of initial losses after data showed U.S. job openings in April fell to their lowest in more than three years, the latest economic report to suggest growth in the world's largest economy is cooling. This allows the Federal Reserve more room to cut interest rates.
Markets are now pricing in about 44 basis points of easing this year. Additionally, expectations for a September rate reduction now stand around 65 percent, versus below 50 percent last week, according to the CME's FedWatch tool.
Signs of steady inflation and resilient economic growth had forced markets to dial back hopes for both the timing and pace of interest-rate cuts at the start of the year, when many expected policy easing to begin as early as March.
Rate-sensitive megacap stocks rose in premarket trading, with Nvidia, Microsoft and Amazon.com up between 0.4 percent and 1.6 percent.
Investors now await the nonfarm payrolls report, due on Friday, which will provide a more complete picture of the labour market. The ADP National Employment report, as well as surveys on the services sector, are expected later on Wednesday.
At 05:57 ET (13.57 UAE), Dow e-minis were up 44 points, or 0.11 percent, S&P 500 e-minis were up 10.5 points, or 0.20 percent, and Nasdaq 100 e-minis were up 82.5 points, or 0.44 percent.