US stock index futures were little changed in evening trading on Sunday after inflation data sent Wall Street higher on hopes that the Federal Reserve will still cut interest rates this year. S&P 500 futures rose 0.1% to 5,300.75, while Nasdaq 100 futures were steady at 18,590.0 at 19:39 ET (23:39 GMT). Dow Jones Futures rose 0.1% to 13,830.0.
Bets on September rate cut rise after PCE data reads as expected Wall Street indexes rose sharply on Friday after PCE price index data- the Fed's preferred inflation gauge- read as expected for April.
The PCE index showed inflation eased slightly, although it remains well above the Fed’s 21-year inflation target. But the figure, along with other recent indicators of a cooling U.S. economy, has prompted some to bet that the central bank will begin cutting interest rates in September.
Traders have priced in about a 471bp3T chance of a 25-basis-point cut in September, along with about a 451bp3T chance that the Fed will hold steady, according to the CME Fed Rate Tracker. That positioning has helped boost U.S. stocks. The S&P 500 rose 0.81bp3T to 5,277.51 on Friday, while the Dow Jones Industrial Average rose 1.5 to 38,686.32. The NASDAQ Composite fell as tech stocks weakened, ending the day at 16,735.02.
The focus now turns to upcoming nonfarm payrolls data for May, due later this week, which should provide more signals on the labor market—another key consideration for the Fed in cutting interest rates.
The central bank is scheduled to meet next week and is widely expected to keep interest rates steady. But any comments on future rate decisions will be closely watched. Several Fed officials have warned in recent weeks that sluggish inflation has left the bank less confident about starting to cut rates.
Source: Investing
