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Futures down: Dow 0.14%, S&P 0.21%, Nasdaq 0.23%
April 5 (Reuters) -
U.S. stock index futures slipped on Wednesday in the run up to a fresh batch of economic data, expected to give more clarity on the state of the U.S. economy amid worries that rapid rate hikes by the Federal Reserve may trigger a steep downturn.
At 5:03 a.m. ET, Dow e-minis were down 46 points, or 0.14%, S&P 500 e-minis were down 8.75 points, or 0.21%, and Nasdaq 100 e-minis were down 30.5 points, or 0.23%. Weak job openings data and falling factory orders on Tuesday followed soft manufacturing activity data on Monday, sparking fresh concerns about economic outlook and pushing the S&P 500 to snap a four-day winning streak in the prior session. On Wednesday, investors will keep a close watch on the ADP National Employment report before the opening bell, expected to show that the rise in private payrolls likely slowed in March. The S&P Global Composite and Services PMI and the Institute for Supply Management's (ISM) non-manufacturing PMI for March will also be on the watch list. Expectations of the Fed pausing its aggressive monetary tightening, earlier triggered by the banking sector turmoil, resurfaced.
Traders' bets of a no hike in May stood at 54.6%, with the rest on a 25-basis point hike, according to CME Group's Fedwatch tool.
Escalating oil prices following the OPEC+ group's output
cuts have also worsened the outlook for inflation, adding to
investors' anxiety.
"The concern is the Federal Reserve might have to sound the
retreat before its war on inflation is truly done," said AJ Bell
head of financial analysis Danni Hewson.
"This could leave us with the worst of all worlds – the
dreaded stagflation where the economy is shrinking but prices
are continuing to surge higher."
As U.S. Treasury yields rebounded after falling over the
past few sessions, major technology and other growth stocks like
Microsoft Corp , Apple Inc and Tesla Inc fell between 0.2% and 0.8% in premarket trading.
Among individual stocks, Nvidia Corp fell 1.2%
after Alphabet Inc's Google said that its
supercomputer-trained artificial intelligence models were better
than the chipmaker's comparable systems.
Both the benchmark S&P 500 and tech-heavy Nasdaq are
on track to notch weekly declines in four in the
holiday-shortened week.
Western Alliance Bancorp dropped 2.2% after the
bank's first-quarter unrealized losses on securities and
held-for-investment (HFI) loans narrowed since 2022 end.
Johnson & Johnson gained 3% after placing its unit
in bankruptcy for second time to pay $8.9 billion to settle tens
of thousands of lawsuits alleging that talc in its iconic Baby
Powder and other products caused cancer.
(Reporting by Ankika Biswas in Bengaluru; Editing by Nivedita
Bhattacharjee)
