Futures mixed in run-up to labor data; Powell signals modest rate cuts

Reuters

Futures mixed in run-up to labor data; Powell signals modest rate cuts

Oct 1, 2024 at 11:45 am GMT

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Aug JOLTS report, Sept. ISM survey due at 10 a.m. ET

Boeing slips after report of weighing capital raise

Futures: Dow off 0.17%, S&P 500 up 0.07%, Nasdaq up 0.28%

Updated at 07:07 a.m. ET/ 1107 GMT

By Johann M Cherian and Purvi Agarwal

Oct 1 (Reuters) -U.S. stock index futures were mixed onTuesday ahead of the first of multiple labor market reports this week,a day after Federal Reserve Chair Jerome Powell pushed back against market expectations for outsized interest rate cuts.

At an economics conference on Monday Powell reiterated that the central bank is likely to reduce borrowing costs by an additional 50 basis points by year-end, based on data that pointed to robust consumer spending and gross domestic income.

Traders, who were divided over thesize of the Fed's upcoming interest rate cuts, are now pricing in a 25 bps reduction at the November meeting with a 60.2% probability, compared with 41.8% a week ago, as per the CME Group's FedWatch Tool.

With inflation nearing the central bank's 2% target, focus is squarely on the labor market, the mandatethe Fed is focused on after kickingoff its monetarypolicy easing cycle inSeptember.

All eyes are on August's job openings and labor turnover survey (JOLTS) due at 10 a.m. ET, along with the Institute for Supply Management's estimate for manufacturing activity in September.

"Given that Powell thinks inflation has been conquered, a surprise in the employment reports could still alter the Fed's course," analysts at Rabobank said in a note.

"After all, it's not preset. For example, very poor employment growth or a jump in the unemployment rate could still push the FOMC (Federal Open Market Committee) to make a 50 bps cut."

At 7:07 a.m., Dow E-minis 1YMcv1 were down 72 points, or 0.17%, S&P 500 E-minis EScv1 were up 4 points, or 0.07%, andNasdaq 100 E-minis NQcv1 were up 56.5 points, or 0.28%.

Comments from Fed PresidentsRaphael Bostic, Thomas Barkin, and Susan Collins, alongside GovernorLisa Cook, will be parsed for their insights on the economy and the monetary policy outlook.

Wall Street's three main indexes closed September higher, bucking a historical trend where equities' performance have been weak on average during the month. The benchmark S&P 500 .SPX and blue-chip Dow .DJI notched their fifth straight month in gains and closed near record highs in the previous session.

Markets also monitored a port strike on the East Coast and the Gulf Coast halting the flow of about half the nation's ocean shipping.

Retailers account for half of all container shipping volumes and shares of Designer Brands DBI.N, Costco COST.O, Walmart WMT.N were little changed in premarket trading.

Boeing BA.N dipped marginally after a report said the planemaker is considering raising at least $10 billion by selling new stock.

CVS Health CVS.N added 2% after a report showed the healthcare firm is exploring options that could include a break-up of the company to separate its retail and insurance units.

McCormick MKC.N was up 2.5% after the hot sauce maker raised annual forecasts and beat third-quarter estimates.

Tesla TSLA.O was flat ahead of reporting third-quarter deliveries on Wednesday, with analysts expecting an 8% jump from a year ago.

Reporting by Johann M Cherian in Bengaluru; Editing by Maju Samuel

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