(Reuters) – U.S. stock index futures were lackluster on Thursday as investors awaited more data to gauge the state of the economy and the Federal Reserve’s policy path, though activity is expected to be muted heading into a long weekend break.
All three major U.S. stock indexes ended higher on Wednesday, with the Dow jumping more than 1%, while the S&P 500 clocked an all-time closing high.
On the radar on Thursday would be the final readings of fourth-quarter GDP and the University of Michigan’s consumer sentiment survey, while weekly jobless claims data will also be in focus.
Heading into the weekend break, focus shall remain on the Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation gauge, due on Good Friday, when the U.S. stock market will be closed.
An upside surprise to inflation could potentially dampen market enthusiasm around early rate cuts.
Overnight, Fed Governor Christopher Waller said that recent disappointing inflation data affirms the case for the U.S. central bank to hold off on cutting its short-term interest rate target, but he did not rule out trimming rates later in the year.
“His words echo those of Bostic, another hawk, who last week said he sees only one cut this year,” strategists at Societe Generale said in a note.
“This puts the Fed on course for a split vote over what to do with interest rates in June if the next three inflation data points do not reassure, or thinking of the dual mandate, employment trends do not deteriorate.”
Traders see an about 60% chance the Fed will begin its easing cycle in June, as per the CME FedWatch tool.
All three indexes eye strong quarterly gains as an artificial intelligence-fueled rally helped Wall Street reach record highs earlier this month. Optimism about the Fed pivoting to cutting rates later in the year also added to gains.
At 05:20 a.m. ET, Dow e-minis were down 5 points, or 0.01%, S&P 500 e-minis fell 5.75 points, or 0.11%, and Nasdaq 100 e-minis slipped 35.25 points, or 0.19%.
Most megacap growth stocks edged lower in trading before the bell, with Nvidia down 0.9%. Shares of the AI-giant have fallen more than 2% each in the last two sessions.
Take-Two Interactive Software fell 1.3% after the video game publisher said it would acquire Gearbox Entertainment, best known for the first-person shooter game Borderlands, from Sweden’s Embracer for $460 million.
Cryptocurrency and blockchain-related companies advanced as bitcoin, ethereum prices recovered following a two-day slide. Exchange operator Coinbase Global, software company MicroStrategy and crypto miner Riot Platforms rose between 2.2% – 3.3%.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Rashmi Aich)
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