US stock futures rose slightly on Wednesday, with investors awaiting key inflation data that could influence the Federal Reserve's interest rate decisions. Dow Jones futures increased by 0.18%, or 95 points, while S&P 500 futures gained 0.1%. Nasdaq 100 futures remained steady, down 0.01%, or 2.25 points, at 5:27 am ET. The market is focused on the Personal Consumption Expenditures (PCE) index for August, a closely watched inflation gauge.
The PCE data is expected to show an annual inflation rate of 3.7%, according to economists surveyed by Reuters. Investors are divided on the likelihood of a rate hike in October, with probabilities around 50%, down from 70% a week ago. The Federal Reserve's interest rate decisions will be closely watched, with at least four officials, including Minneapolis Fed President Neel Kashkari, set to make statements.
The decline in US bond yields has supported stocks, with the 10-year Treasury yield falling 2.9 basis points on Wednesday. This follows a surge in yields to their highest level since June 2007. The bond market has experienced significant volatility in September, amid rising oil prices and concerns about inflation.
In pre-market trading, shares of tech giants Nvidia, Alphabet, and Apple rose, while chipmakers AMD and Marvell fell slightly. The performance of major indices has been mixed, with the S&P 500 and Nasdaq on track for their second consecutive quarterly gain, while the Dow Jones is headed for a monthly decline.
Despite a weak September, some stocks have shown resilience. Meta Platforms' shares have surged 30% this month, driven by interest in its AI-powered chatbot, although they fell 0.3% in early trading. Boeing's shares rose 2.9% after securing a $20 billion contract to develop a new naval fighter jet.
Other stocks made significant moves, with Robinhood gaining 2.3% after announcing extended trading hours for some US stocks over weekends. In contrast, Northrop Grumman's shares fell 4.2% after losing a major contract. The company's performance was impacted by the competitive nature of the defense industry.
The market's focus on inflation data and interest rate decisions is expected to continue, with investors monitoring economic indicators and Fed officials' statements for clues on future policy moves. The outcome of these events could have a significant impact on market sentiment and stock performance in the coming days.
Key points
- Investors await key inflation data, including the PCE index, to gauge the Fed's interest rate decisions.
- US bond yields have declined, supporting stocks, amid concerns about inflation and interest rates.
- Major indices have shown mixed performance, with the S&P 500 and Nasdaq on track for quarterly gains, while the Dow Jones is headed for a decline.
