Futures inch higher as investors assess Fed minutes; Cisco gains
2023.08.17 06:05
© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo/File Photo
(Reuters) – U.S. stock index futures edged higher on Thursday, a day after minutes of the Federal Reserve’s last policy meeting showed most officials held a hawkish view on interest rates, while shares of Cisco gained on upbeat quarterly results.
Most policymakers continued to prioritize the battle against inflation at the Fed’s July 25-26 meeting, while few participants cited risks to the economy if rates were pushed too high, according to the meeting minutes.
Wall Street’s main indexes closed lower on Wednesday as the minutes fueled worries that the Fed could tighten monetary policy further, especially after recent data on retail sales and industrial production highlighted resilience in the U.S. economy.
“The fight (against) inflation in the United States is still ongoing, with the minutes from the Federal Reserve meeting indicating that another rate hike is still on the table, which has the potential to push the US into a deeper downturn,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Supporting futures on Thursday, Cisco Systems (NASDAQ:) gained 2.9% in premarket trading after the networking equipment maker’s fourth-quarter results beat estimates, and its CEO talked up artificial intelligence opportunities.
Shares of retailer Walmart (NYSE:) advanced 1.0% ahead of its quarterly earnings due later in the day.
On the economic data front, a report from the Labor Department due at 8:30 am ET (1230 GMT) is expected to show initial weekly jobless claims fell to 240,000 last week from 248,000 the week before.
The numbers, which could potentially signal a tight labor market, will be parsed for additional clues on the path for U.S. interest rates.
Traders’ bets of a rate hike pause from the Fed in September have slipped to 86.5% from about 89% a week earlier, according to CME Group’s (NASDAQ:) Fedwatch tool.
The yield on was at a fresh 10-month high on Thursday while that on the two-year Treasury note, which best reflects short term-rate expectations, edged lower to 4.97%.
Nvidia (NASDAQ:) rose 1%, outpacing its megacap growth peers. Its shares have rallied this week with analysts raising price targets ahead of the chip designer’s quarterly results later this month, with Oppenheimer being the latest to hike its PT on Thursday.
At 5:24 a.m. ET, were up 52 points, or 0.15%, were up 7.25 points, or 0.16%, and were up 27.75 points, or 0.19%.
Shares of Ball Corp (NYSE:) climbed 5.1% after Britain’s BAE Systems (OTC:) agreed to buy the beer can supplier’s aerospace assets for about $5.55 billion.
