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Nasdaq futures surge as tech gains offset Fed caution
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Nasdaq futures surge as tech gains offset Fed caution
Jun 13, 2024 4:37 AM

(Reuters) - Futures tracking the Nasdaq leapt on Thursday on gains in heavyweight technology stocks, aided by broadly unchanged bets on the Federal Reserve easing interest rates in September despite the central bank projecting just one cut this year.

Investor sentiment got a boost from softer-than-expected inflation data and Fed Chairman Jerome Powell's acknowledgement that progress had been made in tackling price pressures.

While markets trimmed bets on a September start to rate cuts, they still expect an over 60% chance of that happening, according to the CME's FedWatch tool. Interest rate traders are pricing in nearly two 25 basis point cuts, according to LSEG data.

"Ultimately, whether there are one or two rate cuts this year matters much less than the overall path of policy rates, the FOMC remains entirely data-dependent, but it acknowledges that policy must stop being restrictive before it harms the economy," said Paolo Zanghieri, senior economist at Generali Investments.

"We do not think that the current meeting rules out our expectation of two rate cuts this year," Zanghieri said.

Benchmark Treasury yields slid on Wednesday, helping the S&P 500 and Nasdaq close at record highs even though they pared gains from earlier in the session.

May's producer price index reading and weekly jobless claims data are due before markets open on Thursday, and New York Fed President John Williams will moderate a panel later in the day.

A rally in tech stocks persisted in premarket trading, with shares of Broadcom soaring 13.5% after the company raised its forecasts for revenue from chips designed for artificial intelligence operations and announced a 10-for-1 forward stock split.

Peer Nvidia rose 2.1%, though shares of other megacaps Amazon, Meta Platforms and Alphabet slipped between 0.4% and 0.6%.

Solid gains in a handful of megacap technology stocks and expectations of a soft landing for the economy have been key factors behind the S&P 500 and Nasdaq's strong runs this year.

S&P 500 futures rose on Thursday, though Dow futures fell after the blue-chip index closed roughly flat in the previous session.

Futures tracking the more economically sensitive small-cap Russell 2000 also fell 0.5% after the index notched its best day in over a month on Wednesday.

Apple shares rose 0.2%, set to reclaim the title of the world's most valuable company from Microsoft if gains hold.

At 5:40 a.m. ET, Dow e-minis were down 119 points, or 0.31%, S&P 500 e-minis were up 2.75 points, or 0.05%, and Nasdaq 100 e-minis were up 100.25 points, or 0.51%.

Meanwhile, Tesla leapt 5% after Elon Musk said company shareholders were voting to approve his $56 billion pay package and to move the electric-vehicle maker's legal home to Texas.

Virgin Galactic plunged 7.8%, a day after announcing a 1-for-20 reverse stock split.

(Reporting by Lisa Mattackal in Bengaluru; Editing by Devika Syamnath)

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