U.S. Stock Futures Steady Amid Pre-Holiday Trading and Fed Watch

U.S. stock index futures showed minimal change ahead of a holiday session, with markets anticipating key economic data and the Federal Reserve's June policy meeting minutes. Focus is on employment reports and potential rate cuts by the Fed. Tesla and tech stocks exhibit gains, while broader market strength remains limited.

U.S. stock index futures were little changed on Wednesday ahead of a holiday-shortened trading session, while markets also geared up for a slew of economic data and minutes from the Federal Reserve's June policy meeting for more direction.

The equity market will close early on Wednesday and stay shut on Thursday on account of U.S. Independence Day, keeping trading volumes thin throughout the week. The ADP National Employment report and weekly jobless claims are due before the opening bell, a day after data showed higher U.S. job openings as well as layoffs in May. This also comes ahead of Friday's closely watched non-farm payrolls data.

"Our view remains that we should see a slowing down of the employment data over the coming months. If employment slows and the disinflation trend is intact, Fed will deliver a September rate cut," Jefferies chief Europe economist Mohit Kumar wrote. Market participants see a 65% chance of the first rate cut in September, and around two cuts by year end, as per LSEG's FedWatch data.

The other data points on the watch list include factory orders and services PMIs after markets open, along with the Fed's June meeting minutes at 2 p.m. ET. Gains in Tesla and megacap stocks helped the Nasdaq and the S&P 500 to close at record highs on Tuesday, a day that also saw Fed Chair Jerome Powell acknowledge the "disinflationary path," while also flagging the need for more data before cutting interest rates.

"A 25-bps cut may not make much difference to the economy, but if the Fed is proactive, then no one can blame Powell for not doing his job by keeping rates higher for longer and engineering a slowdown," Jefferies' Kumar added. Tesla rose 2.7% premarket after hitting its highest level since January on Tuesday following a smaller-than-expected drop in second-quarter vehicle deliveries.

Nvidia slipped 0.6%, in a recent choppy run for the AI chip leader after its staggering gains since 2023, even when other semiconductor stocks held their ground on the day. Other megacaps Alphabet, Microsoft, Meta Platforms and Amazon inched up between 0.2% and 0.6%.

As the S&P 500 has jumped over 15% in the first half of 2024, largely supported by top-tier high momentum technology-related stocks, the benchmark index's equal-weighted counterpart only rose 5%, signaling the lack of a broad-based market strength. At 7:09 a.m. ET, Dow e-minis were up 42 points, or 0.11%, S&P 500 e-minis were up 1.5 points, or 0.03%, and Nasdaq 100 e-minis were up 2.5 points, or 0.01%.

Among other premarket movers, Paramount Global jumped 11.7% after Shari Redstone's National Amusements reached a preliminary deal to sell its controlling interest in the media giant to David Ellison's Skydance Media.

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