Futures subdued as investors weigh chances of rate pause
2023.06.05 07:17
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 30, 2023. REUTERS/Brendan McDermid
(Reuters) – Wall Street futures were subdued on Monday after a solid rally last week, as investors weighed the possibility of a pause in interest rate hikes by the Federal Reserve at its upcoming policy meeting.
U.S. stocks rallied on Friday after a labor market report showing moderating wage growth in May indicated the U.S. central bank may skip a rate hike next week, while investors welcomed a Washington deal that avoided a catastrophic debt default.
The benchmark S&P 500 closed at a fresh nine-month high on Friday and the tech-heavy Nasdaq scaled a new one-year peak, underpinned by gains in megacap technology stocks that have outperformed the broader market this year.
Traders are pricing in a 78.2% chance that the Fed will hold interest rates at the conclusion of its June 13-14 policy meeting, according to CME Group’s (NASDAQ:) Fedwatch tool, though they expect another hike in July.
Surveys from S&P Global (NYSE:) and Institute for Supply Management on U.S. services sector activity in May are due after the opening bell, while Fed Cleveland President Loretta Mester is slated to speak at an event later in the day.
At 5:55 a.m. ET, were up 40 points, or 0.12%, were up 0.25 points, or 0.01%, and were down 39.25 points, or 0.27%.
Energy stocks including Exxon Mobil Corp (NYSE:), Chevron Corp (NYSE:) and Schlumberger (NYSE:) Ltd rose about 1% each in premarket trading, as oil prices jumped more than 2% after top global exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July. [O/R]
Palo Alto Networks (NASDAQ:) Inc climbed 5.3% as the cybersecurity firm looks set to replace Dish Network (NASDAQ:) in the . Dish shares tumbled 7.8%.
Big U.S. banks were mixed after the Wall Street Journal reported that U.S. regulators were preparing to tighten rules for large banks, which could include raising their capital requirements by 20% on average. Bank of America Corp (NYSE:) climbed 0.2%, while Citigroup Inc (NYSE:) slipped 0.2%.
Apple Inc (NASDAQ:) edged up 0.6% ahead of its annual software developer conference, where it is widely expected to announce a new mixed-reality headset.
