April 1 (Reuters) - The S&P 500 and the Nasdaq were set to open slightly higher on Monday after the latest inflation print showing moderating consumer prices bolstered hopes of an early interest rate cut by the Federal Reserve.
The Commerce Department's data on Friday showed the personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge - rose 0.3% in February, compared with the estimates of a 0.4% increase, according to economists polled by Reuters.
The report strengthened rate-cut bets, with money markets pricing in a 66% chance of at least a 25 basis point cut in June, compared with 55% a day before the data was released, according to the CME Group's FedWatch tool.
Fed Chair Jerome Powell said on Friday that the latest U.S. inflation data was "along the lines of what we would like to see" - comments that appeared to keep the central bank's baseline for interest rate cuts this year intact.
Market participants, however, expect the central bank to stand pat on rates at the upcoming policy meeting in May.
"There hasn't been a whole lot of movement around those three (expected cuts). The market keeps waiting for data, keeps waiting for the Fed to say things, but you're getting some degree of mixed messages," said Thomas Martin, senior portfolio manager at GLOBALT Investments.
"We're in the camp that they won't (cut) in June, but that they will probably do three (sometimes) this year."
Most megacap growth stocks, which stand to benefit from lower interest rates, edged up in premarket trading, with Microsoft (MSFT.O), opens new tab, Nvidia (NVDA.O), opens new tab and Amazon.com (AMZN.O), opens new tab up between 0.2% and 0.5%.
That indicates a positive start to the second quarter, after the benchmark S&P 500 (.SPX), opens new tab rose 10.16% in the first three months of the year, its biggest gain since 2019. As of the last close, the blue-chip Dow (.DJI), opens new tab sits less than 1% away from breaching the 40,000 level for the first time.
The gains on Wall Street have been powered by optimism around artificial intelligence, robust earnings and hopes of a soft landing - where inflation moderates without causing an economic slowdown.
The yield on the 10-year benchmark U.S. Treasury note , however, rose to 4.237%, weighing on equities.
On the data front, the S&P Global's final manufacturing PMI report for March is expected at 9:45 a.m. ET and the ISM manufacturing PMI report for March is due at 10:00 a.m. ET.
At 8:31 a.m. ET, Dow e-minis were down 4 points, or 0.01%, S&P 500 e-minis were up 3.5 points, or 0.07%, and Nasdaq 100 e-minis were up 23.25 points, or 0.13%.
Most chipmakers also gained, with Micron Technology (MU.O), opens new tab, and Marvell Technology (MRVL.O), opens new tab up 1.3% and 0.7%, respectively.
Spirit Airlines (SAVE.N), opens new tab gained 3.3% after the budget carrier said it would get a monthly credit from International Aero Engines through the end of 2024 as compensation for not being able to operate its jets with engine issues.
United Parcel Service(UPS.N), opens new tab added 1.9% after the world's largest parcel delivery company said it would become the United States Postal Service's (USPS) primary air cargo provider, replacing rival FedEx (FDX.N), opens new tab.
AT&T (T.N), opens new tab fell 2.6% after the wireless carrier said it was investigating a data leak that could have impacted nearly 73 million current and former accounts.
Reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva
