Home Editor's Picks US stock futures edge higher; ADP private payrolls in spotlight

US stock futures edge higher; ADP private payrolls in spotlight

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Investing.com– U.S. stock index futures rose Wednesday, as a swathe of weak U.S. economic readings ramped up hopes that the Federal Reserve will have to eventually cut interest rates to support growth. 

At 06:20 ET (10:20 GMT), Dow Jones Futures rose 65 points, or 0.2%, S&P 500 Futures climbed 12 points, or 0.2%, and Nasdaq 100 Futures gained 90 points, or 0.5%. 

Wall Street indexes rose marginally on Tuesday after data showed job openings in the world’s largest economy fell to a three-year low in April. 

The reading followed weak purchasing managers index data from Monday and a downgraded gross domestic product print from last week.

The S&P 500 rose 0.2%, the NASDAQ Composite gained 0.2% and the economically sensitive Dow Jones Industrial Average rose nearly 0.4%.

More employment data due 

There is more employment figures to digest this week, including the all-important nonfarm payrolls report on Friday.

Prior to this crucial release, U.S. private payrolls are set to be published later Wednesday.

Economists estimate the numbers from payrolls processor ADP will show that private employers hired 173,000 workers in May, down from 192,000 in the previous month. It would be a fresh sign that the U.S. jobs market is cooling in the aftermath of a sharp spike in interest rates from the Fed since March 2022.

There is now a roughly 65% chance the Fed will roll out a 25 basis-point reduction in September, according to CME’s closely-watched FedWatch Tool. Last week, the probability was below 50%.

Expectations of eventual interest rate cuts offered some strength to Wall Street, although the prospect of a cooling U.S. economy kept gains limited. 

HPE, CrowdStrike surge on strong earnings

There are more earnings to digest Wednesday, including from discount retailer Dollar Tree (NASDAQ:DLTR) before the bell, as well as athleisure maker Lululemon (NASDAQ:LULU) after the market closes.

Elsewhere, software consultancy Hewlett Packard Enterprise (NYSE:HPE) surged 14% after it clocked strong quarterly earnings and presented an optimistic outlook on the back of artificial intelligence demand. 

Cybersecurity firm CrowdStrike (NASDAQ:CRWD) rose over 7% after it raised its annual guidance following stronger-than-expected quarterly earnings. 

Crude slips after US inventories build

Crude prices stabilized Wednesday after recent losses with U.S. industry data pointing to a bumper build in U.S. inventories.

By 06:20 ET, U.S. crude futures (WTI) were 0.1% higher at $73.33 per barrel, while the Brent contract inched up 0.1% to $77.63 a barrel.

Oil prices slipped on Tuesday, extending losses from a four-month low touched earlier in the week.

Data from the American Petroleum Institute showed U.S. crude inventories saw a build of about 4 million barrels in the week to May 31. Gasoline and distillate inventories also registered increases, raising concerns around demand in the world’s biggest fuel consumer despite the start of the travel-heavy summer season.

The crude market had seen weakness after a weekend meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+. The oil group left open the possibility that voluntary cuts by eight of its members could be gradually unwound from October onward, exacerbating worries about oversupply in an environment where elevated interest rates are threatening to dent broader demand.

(Ambar Warrick contributed to this article.)

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