Sept 9 (Reuters) - Wall Street was set for a higher open on Monday, rebounding from a week of heavy losses as investors remained optimistic about a soft landing scenario for the U.S. economy ahead of a crucial inflation report later in the week.
All megacap stocks rose in premarket trading, with Tesla (TSLA.O), leading the gains, rising 2.2%.
Most chip stocks, which also saw heavy selling last week, recovered with AMD (AMD.O), and Marvell Technology (MRVL.O), advancing 1% and 1.5%, respectively.
Global markets were rattled last week as uncertainty over the U.S. economy's health rippled across assets, adding fuel to an already volatile period that has investors grappling with a shift in the Federal Reserve's policy and worries over stretched valuations.
Friday's weaker-than-expected August jobs data spurred worries on economic growth and drove the Nasdaq Composite (.IXIC), to its worst week since January 2022, while the S&P 500 (.SPX), saw its biggest weekly drop since March 2023.
Still, S&P 500 was 13.4% higher so far this year as hopes of a soft landing for the U.S. economy remained alive with the Fed expected to begin its rate-cutting cycle next week.
Markets will be squarely focused on U.S. consumer prices data on Wednesday that is expected to show a moderation in headline inflation in August to 2.6% on a yearly basis, while on a monthly basis it is expected to remain unchanged at 0.2%.
"While the inflation battle is not fully won, it appears safe to say that the Fed should feel comfortable that inflation is sufficiently under control to begin moving monetary policy in a less restrictive direction," said Ronald Temple, chief market strategist at Lazard.
This will be followed by producer prices data on Thursday.
Money markets currently see a 75% chance of a 25-basis-point rate reduction by the Fed next week and expect a total monetary easing of 100 bps by the end of the year, according to CME's FedWatch Tool.
Bank of America, the most conservative among Wall Street's brokerages on the size of the Fed's expected rate cuts this year, raised its forecast to match most of its peers' expectations of 25 bps of easing in each of the three remaining policy meetings this year.
At 08:25 a.m. ET, Dow E-minis were up 227 points, or 0.56%, Nasdaq 100 E-minis were up 111 points, or 0.6% and S&P 500 E-minis were up 28.75 points, or 0.53%.
Debate between Democrat Kamala Harris and Republican Donald Trump on Tuesday - the first time ahead of the presidential election on Nov. 5 - will be closely eyed by the investors.
Among individual movers, Boeing (BA.N), advanced 3.7% after it reached a tentative agreement with a union representing more than 32,000 workers in the U.S. Pacific Northwest, in a deal that could help avert a possible crippling strike as early as Sept. 13.
Eli Lilly (LLY.N), climbed 1% after the drugmaker appointed insider Lucas Montarce as its chief financial officer.
Dell Technologies (DELL.N), and Palantir (PLTR.N), rose 4.9% and 8.4% respectively, while Erie (ERIE.O), climbed 3.3% as they are set to join the S&P 500 index on Sept. 23.
These companies will replace American Airlines Group (AAL.O), Etsy (ETSY.O), and Bio-Rad Laboratories (BIO.N), respectively, in the index.
Reporting by Shubham Batra and Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips and Maju Samuel
