Traders are currently pricing in rate cuts worth 48 bps from the Federal Reserve by the end of 2024, with the first cut seen either in September or November
U.S. stock index futures inched up on Monday, pointing to more gains on Wall Street, as traders priced in a higher probability of the Fed cutting interest rates this year.
The benchmark S&P 500 and the blue-chip Dow ended at three-week peaks on Friday after data showed U.S. job growth slowed more than expected in April, taking pressure off the U.S. central bank to keep rates higher for longer.
Traders are currently pricing in rate cuts worth 48 bps from the Federal Reserve by the end of 2024, with the first cut seen either in September or November, as per LSEG’s rate probability app. In recent weeks, traders had priced in just one cut due to signs of sticky inflation.
U.S. stock indexes seem to have stabilized after a volatile April, as a much better-than-expected first-quarter earnings season and hopes of U.S. monetary policy easing drew buyers back into the market.
The Federal Reserve last week left interest rates unchanged and signalled it was leaning toward eventual cuts in borrowing costs, but repeated that it wants to gain “greater confidence” that inflation will continue to drop before cutting rates.
Richmond Fed President Thomas Barkin and New York Fed President John Williams are scheduled to speak later in the day, followed by speeches from a host of U.S. central bank officials this week.
Key data for the week includes weekly jobless claims and U.S. consumer sentiment data for May.
At 9:44 am GMT, S&P 500 e-minis were up 13.25 points, or 0.26%. Nasdaq 100 e-minis added 41.25 points, or 0.23%, while Dow e-minis jumped 88 points, or 0.23%.
