S&P 500, Nasdaq futures rise as markets await inflation data

By Johann M Cherian and Lisa Pauline Mattackal

(Reuters) – Futures for the S&P 500 and the Nasdaq edged higher on Tuesday after a holiday-extended weekend, as investors awaited key inflation data later in the week that could test expectations for the Federal Reserve’s monetary policy path.

The tech-heavy Nasdaq and the benchmark S&P 500 managed to notch their fifth straight week of gains on Friday.

Market attention now shifts to the U.S. core Personal Consumption Expenditures Price Index report for April later in the week. The Fed’s preferred inflation barometer is expected to hold steady on a monthly basis.

Expectations for the timing of rate cuts have see-sawed as Fed policymakers continue to dismiss the need for imminent rate cuts, given data reflects a still-resilient economy and sticky inflation.

Traders see a 51.2% chance that the first rate cut of at-least 25 basis points could be delivered in September, according to the CME FedWatch Tool.

Futures for the Nasdaq rose, led by a 2.6% rise in AI darling Nvidia, after closing at a record high on Friday.

Market sentiment remains fairly upbeat, with the S&P 500 hovering just below all-time highs. UBS Global Research raised its year-end target for the benchmark index to 5,600 from an earlier projection of 5,400, marking the highest forecast among major brokerages.

The “T+1” settlement cycle will be implemented starting from Tuesday’s session and analysts expect extreme price volatility. The reform, designed to reduce counterparty risk and improve market liquidity, will ensure the settlement of trades in one business day rather than two.

“Banks and the exchanges have been planning this for months, and this week we will see if the machine runs smoothly or if there will be some early missteps,” said Kathleen Brooks, research director at XTB.

U.S. consumer confidence data for May is due at 10 a.m. ET. Other key events this week include the second estimate for first-quarter gross domestic product and the Fed’s Beige Book, along with remarks from a number of central bankers.

Minneapolis Fed President Neel Kashkari said in an interview with CNBC broadcast that the U.S. central bank should wait before cutting interest rates, adding that it could potentially even hike rates if inflation fails to fall further.

At 7:07 a.m. ET, Dow e-minis were down 44 points, or 0.11%, S&P 500 e-minis were up 5.5 points, or 0.10%, and Nasdaq 100 e-minis were up 44.75 points, or 0.24%.

Apple jumped, up 2.0% after iPhone sales in China surged 52% in April from a year earlier, Reuters calculations based on industry data showed. Shares of Apple supplier Qualcomm rose 2.2%.

Story continues

Meme stock GameStop shot up 24.2% after the videogame retailer said late on Friday it had raised $933 million by selling 45 million shares, as part of an “at-the-market” offering.

(Reporting by Johann M Cherian, Lisa Pauline Mattackal and Shubham Batra in Bengaluru; Editing by Pooja Desai)