March 3, 2024

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US futures slide as stocks rally halts

US futures slide as stocks rally halts

U.S. stock futures fell on Wednesday, signaling a potential pullback in a record high as slowing inflation abroad helped boost confidence in the prospect of interest rate cuts early next year.

Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) futures fell about 0.2%. The tech-heavy Nasdaq 100 (^NDX) tracked the pace of declines, with futures down 0.3%.

Stocks benefited from a rally on Tuesday, giving the Dow Jones its fifth straight record close and bringing the S&P 500 closer to its all-time high in January 2022. Investors shrugged off hawkish comments from Federal Reserve officials, who have tried to temper expectations that the bank The central bank will quickly move to lower benchmark interest rates.

Read more: What a pause on federal interest rate hikes means for bank accounts, CDs, loans and credit cards

A surprise fall in UK inflation to its lowest level in two years has increased optimism that price pressures are easing in leading economies, and a decline in German wholesale inflation has reinforced this view. Bond yields added to their decline this month, with the 10-year Treasury yield (^TNX) falling more than 4 basis points to around 3.9%.

But some question whether the expected faster rate cuts will eventually push the US economy into recession. All eyes will be on the upcoming data for clues on whether the Fed can deliver a “soft landing”: a reading on existing home sales is due on Wednesday, ahead of Thursday’s update on GDP and Friday’s reading on personal consumption expenditures inflation, which is The Fed’s preferred measure.

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In individual companies, shares of FedEx (FDX) fell 9% in pre-market trading after the delivery company beat quarterly earnings expectations. It also lowered its full-year revenue forecast amid lower demand for the US Postal Service.

He lives1 update

  • Housing is in focus as the market continues to rise

    The US housing market will remain the focus of investors’ attention on Wednesday, with the weekly reading on mortgage applications scheduled for 7:00 AM ET and existing home sales scheduled for 9:00 AM ET.

    The Conference Board’s December Consumer Confidence reading is also scheduled for release at 10:00 AM ET.

    The market rally continued on Tuesday, with the Dow Jones hitting another record high and the S&P 500 on the verge of setting its own record.

    The Nasdaq Composite also surpassed 15,000 on Tuesday for the first time since January 2022, when the technology index was on track to decline to start its most challenging year in decades.

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