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NEW YORK / WAM
US stock index futures edged lower on Wednesday as jittery investors awaited economic data and comments from Federal Reserve Chair Jerome Powell after strong readings on the US economy tempered bets on interest rate cuts this year, Reuters reported. The tech-heavy Nasdaq and the blue-chip Dow closed at two-week lows on Tuesday as Treasury yields rose to multi-month highs in the wake of stronger-than-expected manufacturing activity and factory orders data that raised doubts whether the Fed will cut interest rates thrice in 2024 as expected.
The benchmark 10-year US Treasury yield edged up to 4.377 percent, having touched a 2024 peak of 4.05 percent in the prior session. March private payrolls and services sector data could offer fresh insights on the US economy.
Traders are pricing in a 62 percent chance that the Fed will cut interest rates by 25 basis points in June, according to CMEGroup’s FedWatch tool, slightly down from about 64 percent a week ago.
Market participants have also pared back their expectations on the number of rate cuts to about two this year from three a few weeks ago, according to LSEG’s rate probability app.