© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 14, 2024. REUTERS/Brendan McDermid
By Johann M Cherian and Ankika Biswas
(Reuters) – Wall Street’s main stock indexes were on course for a subdued opening on Thursday as investors parsed a mixed batch of economic data for clues on when the Federal Reserve would deliver its first interest-rate cut.
Futures received an initial lift after a Commerce Department report showed retail sales fell 0.8% in January, compared to the 0.1% slip expected by economists polled by Reuters.
Bets for an at least 25-basis-point rate cut in May edged up to 44.5%, from nearly 39% before the data, while odds for June stood at 83%, according to the CME Group’s (NASDAQ:) FedWatch Tool.
“The retail sales (report) is the perfect data point the market needed right now,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
On the other hand, a Labor Department report showed initial claims for state unemployment benefits stood at 212,000 for the week ended Feb. 10, versus the estimated 220,000 figure.
“We’re in the scenario where the Fed’s not going to get enough data to cut at least until September. We are forecasting a cut much further out simply because there’s still too many other aspects of the U.S. economy that are being stubborn,” Blancato said.
The data comes on the heels of a warmer-than-expected inflation report that led to more uncertainty about the timing of interest-rate cuts this year. However, investors found some relief after policymakers said price pressures were still moderating, although the path to the 2% target might be bumpy.
Wall Street regained some lost ground on Wednesday after an inflation-induced malaise, with the closing above the psychological 5,000-point mark for the third time this month.
Nvidia (NASDAQ:) dethroned Google-parent Alphabet (NASDAQ:) to become the country’s third most valuable firm days after it overtook Amazon.com (NASDAQ:), boosted by the excitement around artificial intelligence (AI).
Comments from Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic, due in the day, will also be scrutinized for their perspectives on the monetary policy easing outlook.
Recently released gross domestic product (GDP) data showed that UK and Japan, two of the world’s top economies, slipped into negative growth for two straight quarters.
At 8:56 a.m. ET, were up 69 points, or 0.18%, were up 5 points, or 0.10%, and were up 15.75 points, or 0.09%.
Investor optimism was also buoyed by a robust season that saw nearly 80% of S&P 500 companies beating earnings expectations, LSEG data showed on Tuesday, surpassing an annual average of 76%.
Among premarket movers, Cisco Systems (NASDAQ:) shed 4.3% as it planned to cut 5% of its global workforce and lowered its annual revenue target to navigate a tough economy.
Deere (NYSE:) & Co, the world’s largest farm-equipment maker, lost 3.4% after cutting its 2024 profit forecast, while West Pharmaceutical Services (N:) tumbled 17.5% after the pharmaceuticals firm forecast full-year results below analysts’ estimates.
SoundHound AI (NASDAQ:) jumped 76.0%, while Arm climbed 1.9% after Nvidia disclosed stakes in both AI-related firms.
Alphabet dipped 1.8% after investment firm Third Point dissolved its stake in the megacap, while Apple (NASDAQ:) slipped 0.6% after Berkshire Hathaway (NYSE:) trimmed its large stake in the iPhone-maker and Soros Fund Management dissolved its stake in the company.
This story originally appeared on Investing
