Wall Street Awaits Key Economic Data Amid Fed Uncertainty

Wall Street futures dipped ahead of crucial U.S. economic data, with uncertainty over the Federal Reserve's interest rate policies weighing on investor sentiment. Major companies like Alphabet, Microsoft, and Nvidia saw pre-market losses, while bond yields rose. Key data releases, including GDP and jobless claims, will provide insights into the current economic landscape.

(Updated at 7:08 a.m. ET / 1108 GMT) *

US GDP, jobless claims numbers due at 8:30 am ET *

Dollar General beats Q1 sales estimates, shares rise *

Tesla up after report on push to roll out advanced FSD in China *

Futures down: Dow 0.85%, S&P 0.39%, Nasdaq 0.30% (For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.)

By Johann M Cherian and Lisa Pauline Mattackal May 30 (Reuters) -

Wall Street futures softened on Thursday, as uncertainty around how long the Federal Reserve could keep interest rates elevated weighed on investor sentiment ahead of crucial data that could help decode the state of the U.S. economy. Megacaps such as Alphabet, Microsoft and Nvidia slipped between 0.4% and 0.8% in trading before the bell, extending losses from Wednesday's session as the yield on Treasury notes hovered above 4.5% for the second day across the board - the highest since the first week of May.

Uncertainty over monetary policy, combined with heavy new Treasury issuance, has pushed bond yields higher and pressured stocks. Rising bond yields typically reflect expectations for higher interest rates, which in turn means costlier financing and smaller profit margins for companies. Investors await the second estimate for first-quarter gross domestic product, expected at 8:30 a.m. ET. According to a Reuters poll, the world's largest economy expanded by 1.3%, slightly less than the previously thought 1.6%.

Also on tap is the jobless claims data, expected to show that the number of Americans filing for State unemployment benefits stood at 218,000, from 215,000 recorded the previous week. The benchmark S&P 500 index is on track for its biggest weekly drop in six, while the blue-chip Dow closed at a four-week low on Wednesday.

Markets now expect the Fed's first 25-basis-point rate cut only in November or December, according to the CME Group's FedWatch Tool. "The Fed cannot yet be satisfied with this level of inflation, given the robust economy, there is also no rush to cut interest rates," Berenberg analysts said in a note.

"We are therefore sticking to our assessment that the Fed will not start the rate-cutting cycle until December." April's personal consumption expenditure report - the Fed's preferred inflation gauge, due on Friday - could also sway bets on the timing of the central bank's first cut.

Hawkish comments from policymakers have also dampened risk sentiment, and traders will assess remarks from New York Fed President John Williams and Dallas Fed President Lorie Logan later in the day. At 7:08 a.m. ET, Dow e-minis were down 329 points, or 0.85%, S&P 500 e-minis were down 20.5 points, or 0.39%, and Nasdaq 100 e-minis were down 56 points, or 0.30%.

Dow component Salesforce forecast second-quarter profit and revenue below Street estimates due to weak client spending on its cloud and enterprise business products, sending its shares down 15.5%. Meanwhile, HP gained 4.9% after beating Wall Street estimates for second-quarter revenue on Wednesday.

Tesla's shares gained 0.9% after Reuters reported the company was preparing to register its 'Full Self-Driving' software in China. American Eagle Outfitters dropped 7.4% after the retailer posted downbeat quarterly revenue as sticky inflation hurt demand for its apparel and accessories, often sold at full price.

Dollar General added 6.3% after the discount retailer posted upbeat first-quarter sales, but department-store chain Kohl's slumped 22% after cutting its annual sales and profit forecasts. Moderna added 2.7% after a report said the U.S. government is nearing an agreement to fund a late-stage trial of the drugmaker's pandemic bird flu vaccine.

After the U.S. switched to faster trade settlements for securities, market participants reported some processing bumps, although the move has been smooth overall.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)