U.S. stock index futures saw gains in overnight trading on Sunday following a rebound on Wall Street prompted by stronger-than-expected payrolls data. Investors now turn their attention to an upcoming inflation report for further insights into interest rates, while also bracing for the start of the first-quarter earnings season.
The robust nonfarm payrolls data released led traders to significantly revise down expectations of a Federal Reserve interest rate cut as early as June, potentially tempering any substantial upside on Wall Street.
As of 19:14 ET (23:14 GMT), S&P 500 Futures rose 0.1% to 5,258.0 points, Nasdaq 100 Futures gained 0.1% to 18,318.50 points, and Dow Jones Futures climbed 0.16% to 39,286.0 points.
Wall Street Resilient Despite Payrolls Surprise, Eyes CPI Data
Despite the stronger-than-expected payrolls data, Wall Street closed higher on Friday, benefiting from bargain hunting after a week of downward trends. However, U.S. stock benchmarks still marked their first weekly loss in three weeks.
The S&P 500 closed up 1.1% at 5,204.34 points, the NASDAQ
Composite rose 1.2% to 16,248.52 points, and the Dow Jones Industrial Average gained 0.8% to 38,904.04 points. Despite Friday’s gains, all three indexes experienced losses ranging from 0.8% to 2.3% for the week.
Focus now shifts to the release of consumer price index (CPI) data for March on Wednesday. While expectations suggest a slight moderation in inflation, it is anticipated to remain well above the Federal Reserve’s 2% annual target. The data release follows repeated warnings from Fed officials about persistent inflationary pressures potentially delaying early interest rate adjustments.
Additionally, investors await the minutes from the Fed’s March meeting, also scheduled for release on Wednesday, which are expected to offer further insights into potential rate adjustments.
The diminished expectations for a rate cut in June were evident, with traders now seeing approximately a 51% probability of a 25 basis point cut, according to the CME Fedwatch tool.
Q1 Earnings Season Commences with Banks in Focus
Investor focus will also be on the upcoming first-quarter earnings season to assess whether major U.S. stocks can justify recent valuation increases. Despite uncertainties, Wall Street indexes have seen gains of approximately 10% so far in 2024, nearing record highs.
Major U.S. lenders including JPMorgan Chase & Co (NYSE: JPM), Citigroup Inc (NYSE: C), and Wells Fargo & Company (NYSE: WFC) are set to report earnings on Friday.
Additionally, Delta Air Lines Inc (NYSE: DAL) and leading asset manager BlackRock Inc (NYSE: BLK) will provide quarterly updates during the week, adding to the market’s assessment of corporate performance and economic outlook.