U.S. stock index futures rose marginally on Tuesday evening amid heightened concerns over economic growth after cautious statements from Federal Reserve Chair Jerome Powell and weaker-than-expected business activity data.
Futures steadied after a negative session on Wall Street, where losses in technology stocks pulled U.S. benchmarks off recent record highs. Tech also saw some profit-taking after a stellar artificial intelligence-driven rally in recent weeks.
Stronger-than-expected earnings from memory chip maker Micron Technology Inc (NASDAQ:MU) helped improve sentiment towards tech. But the stock rose only marginally in aftermarket trade.
S&P 500 Futures rose 0.1% to 6,718.75 points, while Nasdaq 100 Futures rose 0.1% to 24,849.25 points by 19:20 ET (23:20 GMT). Dow Jones Futures were flat at 46,654.0 points.
Investors also remained uncertain over a looming government shutdown, as bipartisan talks over a spending bill appeared to be faltering with about eight days of funding left.
Powell comments, weak PMIs weigh on Wall Street
Powell warned on Tuesday that the Fed now faces a balancing act with “no risk-free path” as it moves to curb sticky inflation and stem further weakness in the labor market.
Speaking at a luncheon in Warwick, Rhode Island, Powell noted that U.S. economic growth had moderated this year, while the labor market had cooled. He also noted that inflation remained above the Fed’s 2% annual target.
Powell flagged a largely cautious, data-driven approach to future rate cuts, warning that inflation could rise back up if rates were cut too aggressively. The Fed cut rates by 25 basis points last week, with markets expecting at least two more similar cuts this year.
But Powell’s comments dampened expectations of more easing. Powell also noted that stock prices appeared “fairly highly valued,” sparking some profit-taking on Wall Street after gains in tech put U.S. bourses at record highs. Market darling Nvidia fell 2.8% after strong gains in the past two sessions, while Apple Inc lost 0.6%.
Weaker-than-expected purchasing managers index data for September also sparked concerns over a moderating economy, with growth in both manufacturing and services activity slowing.
The S&P 500 fell 0.6% to 6,656.96 points, while the NASDAQ Composite fell nearly 1% to 22,573.47 points. The Dow Jones Industrial Average fell 0.2% to 46,292.78 points.
GDP, PCE prices data on tap this week
Investors are now awaiting more insight into the world’s biggest economy, with a final reading on second-quarter gross domestic product growth due on Thursday.
The print had earlier shown the U.S. economy expanding at a strong pace in the second quarter. But this growth is expected to moderate in the coming quarters amid pressure from sticky inflation and higher trade tariffs.
More closely watched this week will be PCE price index data, due on Friday. The print is the Fed’s preferred inflation gauge, and is likely to factor into expectations for future interest rate cuts.
Headline PCE inflation is expected to have remained steady, while core PCE inflation is seen remaining well above the Fed’s 2% annual target.
Source :
https://www.investing.com/news/stock-market-news/us-stock-futures-inch-higher-after-wall-st-dips-on-powell-comments-weak-pmis-4252319
