U.S. stock index futures remained relatively unchanged in Sunday evening trading, following a key inflation report that met expectations and fueled optimism for potential Federal Reserve interest rate cuts later this year.
As of 19:39 ET (23:39 GMT), S&P 500 futures edged up 0.1% to 5,300.75 points, while Nasdaq 100 futures held steady at 18,590.0 points. Dow Jones futures also gained 0.1%, reaching 13,830.0 points.
Inflation Data Spurs September Rate Cut Speculation
On Friday, Wall Street indices surged after the Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred inflation measure, met expectations for April. The PCE reading indicated a slight cooling in inflation, though it remains significantly above the Fed’s 2% annual target.
This data, alongside other indicators of a slowing U.S. economy, has led to increased speculation that the Federal Reserve might cut interest rates in September. According to the CME FedWatch Tool, traders are now pricing in a roughly 47% chance of a 25 basis point cut in September and a 45% chance that rates will remain unchanged. This sentiment bolstered U.S. stock prices.
On Friday, the S&P 500 rose 0.8% to 5,277.51 points, the Dow Jones Industrial Average climbed 1.5% to 38,686.32 points, while the NASDAQ Composite remained flat at 16,735.02 points due to weakness in tech stocks.
Upcoming Economic Data and Fed Meeting in Focus
Attention now shifts to the nonfarm payrolls report for May, due later this week. This report will provide further insight into the labor market, another critical factor for the Federal Reserve’s rate decisions.
The Federal Reserve is scheduled to meet next week, with widespread expectations that it will keep interest rates steady. However, any commentary regarding future rate adjustments will be closely scrutinized. In recent weeks, several Fed officials have expressed concerns that persistent inflation leaves little room for immediate rate cuts.
Additionally, market participants will be monitoring the purchasing managers index (PMI) readings for May, which are expected to provide further economic insights.
Related topics:
Stock Futures Stable Ahead of June Trading
