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U.S. equity futures edged lower Wednesday, extending Wall Street’s April losing streak to a third session, as investors look to adjust Federal Reserve interest-rate forecasts amid a surprisingly resilient domestic economy and renewed inflation pressures.
Stocks ended lower again Tuesday, with the S&P 500 shedding around 38 points, as benchmark 10-year note yields hit a four-month high of 4.4%. The market moves followed stronger-than-expected job-openings data for February and hawkish comments from various Fed officials.
Benchmark 10-year notes were last marked at 4.365% heading into the start of the New York trading session, with 2-year notes holding at 4.705%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.03% lower at 104.785.
Traders are still pricing in a 60%-plus chance that the Fed will begin the first of its three forecast 2024 rate cuts in June, but they continue to eye labor market and inflation data ahead of Friday’s key March jobs report.
Payroll-processing group ADP will publish its reading on private-sector-job creation prior to the start of trading, with investors looking for a headline total of around 148,000 new hires.
Markets will also digest PMI and ISM services data ahead of Fed Chairman Jerome Powell’s speech to the Stanford Business, Government and Society Forum in California late in the session.
“Powell’s recent remarks have hinted at delayed rate cuts, and while expectations lean towards a neutral stance, market participants anticipate Powell to maintain a cautious approach,” said Bas Kooijman, asset manager at DHF Capital in the Netherlands.
“He is expected to weigh the prospect of future rate adjustments against prevailing economic conditions, a scenario that may uphold a strong greenback,” he added.
On Wall Street, investors will also look to the impact of Tuesday’s 7.2-scale earthquake in Taiwan, the largest in 25 years, on supply chains in the chip sector. They are also awaiting results from Disney’s annual shareholder meeting and proxy battle.
Futures contracts tied to the S&P 500 were last marked for an opening-bell decline oof around 11 points, while the Dow was called 30 points lower.
The tech-focused Nasdaq, which is up 8.19% for the year, is priced for a 68-point decline.
Overnight in Asia, the Taiwan earthquake rattled regional markets, with the MSCI ex-Japan index falling 0.95% into the close of trading and the Nikkei 225 ending 0.97% lower in Tokyo.
Europe saw a surprising slowdown in Eurozone inflation, which saw headline pressures easing to 2.6% and the core reading dipping under 3%. That cemented the prospect of a June rate cut from the European Central Bank and lifted the Stoxx 600 into positive territory in Frankfurt.
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