U.S. stock index futures traded in a subdued fashion Tuesday, consolidating after Wall Street clocked a three-day winning streak ahead of an eagerly-awaited speech by Federal Reserve Chair Jerome Powell.
At 05:55 ET (09:55 GMT), Dow Jones Futures gained 85 points, or 0.2%, S&P 500 Futures rose 1 points, or 0.1%, and Nasdaq 100 Futures climbed 9 points, or 0.1%.
The three benchmark indices closed at all-time highs — marking three consecutive winning sessions for the S&P 500 — and recorded fresh intraday records on Monday. This followed the announcement of a $100 billion investment by chip giant Nvidia (NASDAQ:NVDA) in ChatGPT-maker and client OpenAI to help build out data centers.
Powell speech, PMI prints in spotlight
Investors have turned more cautious ahead of a speech by Powell later in the session, with the Fed Chair likely to offer more insight into the central bank’s plans to cut interest rates.
The Fed cut rates by a largely telegraphed 25 basis points last week and flagged at least two more cuts this year, citing weakness in the labor market. But Powell warned that sticky inflation and resilience in jobs could raise questions over further easing.
A number of Fed members warned on Monday that the central bank’s recent cut diminished the need for further easing, but recently-confirmed Fed Governor Stephen Miran on Monday called for aggressive reductions.
Markets are now placing a roughly 90% chance of a quarter-point reduction in the Fed’s target rate from the current range of 4% to 4.25% at the central bank’s next meeting in October, according to CME’s closely-monitored FedWatch Tool. There is also about a 75% chance of another 25-basis point cut at the following gathering in December.
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Aside from Fed speakers, attention will home in on flash U.S. business activity figures for September.
Economists have forecast that S&P Global’s composite purchasing managers index for the month will match August’s reading of 54.6. A level above 50 indicates expansion.
Manufacturing sector PMI is tipped to edge down to 52.2 from 53.0, while the gauge of the services industry -- which accounts for much of U.S. output -- is projected to inch lower to 54.0 from 54.5.
Micron set to report quarterly results
In the corporate sector, Micron (NASDAQ:MU) is expected to reveal its latest quarterly results after the closing bell, and is set to offer more insight into the trajectory of the AI boom.
Recent commentary around the maker of advanced memory and storage chips has been widely bullish, driven by hopes that soaring demand conditions and tighter supplies will support solid earnings and sales.
In August, Micron lifted its fiscal fourth-quarter revenue and adjusted profit forecast, citing an anticipated surge in returns from its memory chips used in AI infrastructure.
Elsewhere, Kenvue (NYSE:KVUE) stock soared premarket, rebounding after a record low the day before, even as U.S. President Donald Trump linked its Tylenol drug to autism risk during pregnancy at a White House press conference.
Firefly Aerospace (NASDAQ:FLY) stock slumped on the back of its financial results, the first to come out since the rocket maker’s Nasdaq debut in early August. It posted a wider loss and lower-than-expected revenue in its second quarter.
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Crude bounces
Oil prices rose, bouncing from earlier losses after healthy activity data in Europe raised hopes of raised consumption in this important region.
At 05:55 ET, Brent futures gained 0.4% to $66.83 a barrel, and U.S. West Texas Intermediate crude futures rose 0.6% to $62.64 a barrel.
Eurozone business activity grew at its fastest pace in 16 months in September, as the HCOB Flash Eurozone Composite Purchasing Managers’ Index, compiled by S&P Global, edged up to 51.2 in September from 51.0 in August, marking the ninth consecutive month of growth.
That said, both benchmarks are currently suffering a five-session losing streak on concerns of global oversupply.
Iraq’s federal and Kurdish regional governments reached a deal with oil firms to resume crude exports via Turkey on Monday, Reuters reported, potentially allowing exports of about 230,000 barrels per day to resume, having been suspended since March 2023.
In its latest monthly report, the International Energy Agency said world oil supply will rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows.
