U.S. stock futures were subdued on Thursday as investors preferred to stay on the sidelines ahead of crucial inflation numbers that are likely to influence the Federal Reserve’s monetary policy path.
A reading of consumer prices is due at 8:30 a.m. ET, with inflation expected to have picked up in August. Last month’s producer inflation numbers, released on Wednesday, fell unexpectedly, boosting expectations of interest-rate cuts from the Fed at its meeting next week.
Recent economic indicators have shown the U.S. labor market was weaker than previously thought, bringing bets on a bigger-than-usual 50-basis-point trim in September to 10.2 per cent, according to CME’s FedWatch tool.
Continued labor market weakness, especially weak nonfarm payrolls data for July and August, prompted investors to fully price in at least 25 bps of easing at the central bank’s September 16-17 meeting.
“We expect… forthcoming consumer price inflation data today to also keep the door open for a resumption in U.S. interest-rate cuts,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
“The combination of a moderation in jobs growth and still-manageable inflation should keep the Fed on track to cut rates, with a 25-basis-point cut expected in September.”
A weekly reading of jobless claims data is also due alongside the inflation report.
At 5:15 a.m. ET, Dow E-minis YMcv1 rose 22 points, or 0.05 per cent, S&P 500 E-minis EScv1 added 7.75 points, or 0.12 per cent, and Nasdaq 100 E-minis NQcv1 were up 47.75 points, or 0.20 per cent.
The S&P 500 and the Nasdaq notched record high closes on Wednesday, partly helped by a nearly 36 per cent surge in Oracle ORCL.N after an upbeat forecast that brought the cloud computing company closer to joining the trillion-dollar club.
It revived the AI trade on Wednesday, sparking a rally in artificial-intelligence-linked chip and utility companies supplying power to data centers.
Oracle rose 1.5 per cent in premarket trading on Thursday.
Wall Street’s three main indexes have had a broadly positive start to September, a month deemed historically bad for U.S. equities, when the benchmark S&P 500 has shed 1.5 per cent on average since 2000, data compiled by LSEG showed.
Gun stocks also climbed before the bell, extending their rally from the previous session after conservative activist Charlie Kirk was shot dead at a university in Utah on Wednesday.
GrabAGun gained 3.9 per cent and Smith & Wesson Brands was up 3.7 per cent.
Stocks linked to ether rose, tracking gains in the cryptocurrency. Sharplink Gaming advanced 2.1 per cent, Bit Digital was up 2.5 per cent and Bitmine Immersion Technologies was 5.3 per cent higher.
World stocks consolidated near all-time highs while the dollar crept up on Thursday, as traders readied for the European Central Bank’s latest interest rate decision as well as new U.S. inflation data later.
High-flying tech shares lifted Japan, Taiwan and South Korea’s bourses to record peaks overnight and Europe was having a steady morning ahead of what is set to be a second hold in a row in the euro zone’s 2 per cent rates from the ECB after lunch.
With that and closely watched U.S. consumer price inflation data coming, most traders were keeping their powder dry.
The euro hovered at $1.1690 having soared nearly 13 per cent versus the dollar this year, while the bond vigilantes hadn’t yet managed to decisively push politically strained France’s borrowing costs above Italy’s.
ABN AMRO strategist Benoit Begoc said with the ECB widely expected to hold rates, the focus is on whether it keeps the door ajar for further cuts and its new set of economic forecasts this meeting.
“I think the question will be why are you not cutting rates more?” Begoc said. “We know we have some deflationary pressures and there is no big rise in consumer confidence, so what is the rationale behind that?”
Ahead of the 8:15 a.m. ET ECB decision and 8:45 a.m. ET press conference, the pan-European STOXX 600 edged up 0.3 per cent while Germany’s 10-year bond yield eased to 2.65 per cent having touched 2.80 per cent – its highest since March – just last week.
In the commodity markets, oil prices also dipped after gaining more than 1 per cent on Wednesday when Poland’s downing of suspected Russian drones triggered fresh talk of sanctions a day after Israel attacked Hamas leadership in Qatar.
Safe-haven gold edged away from its recent record highs and bellwether metal copper took a breather from its more than 20 per cent rally since U.S. President Donald Trump’s trade tariffs shook global markets back in April.
Overnight in Asia, Japan’s Nikkei gained 1.2 per cent to hit a record as tech, energy and utilities firms jumped. South Korean shares rose 0.9 per cent.
In Tokyo. SoftBank rose almost 10 per cent after the roaring gains for its Stargate Project partner Oracle. That 36 per cent leap had been the biggest one-day gain since 1992 for the 48-year-old tech giant.
In foreign exchange, movement was largely muted, with the U.S. dollar struggling for direction and the main six currency dollar index a touch above a seven-week trough.
Ten-year Treasury yields edged up 2 basis points to 4.0531 per cent, having fallen 4 basis points on Wednesday after the PPI data and as a solid 10-year note auction alleviated some concern about investor appetite for long-term U.S. debt.
An even more telling gauge will be the Treasury’s $22 billion sale of 30-year bonds on Thursday. The 30-year yield rose 2 bps to 4.7028 per cent, having come down more than 30 basis points since it briefly topped 5 per cent a week ago.
Reuters
