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Futures off: Dow 0.86%, S&P 0.44%, Nasdaq 0.41%
May 30 (Reuters) - Uncertainty around how long the
Federal Reserve could keep interest rates elevated weighed on
U.S. stock index futures on Thursday, while investors were
cautious ahead of crucial data that could help decipher the
state of the economy.
Megacaps such as Alphabet, Microsoft ( MSFT ) and
Nvidia ( NVDA ) slipped between 0.3% and 0.8% in trading before
the bell as the yield on Treasury notes hovered above 4.5% for
the second day across the board - the highest since the first
week of May.
Rising bond yields typically reflect expectations for higher
interest rates, which in turn means costlier financing and
smaller profit margins for companies.
At the top of investors' watchlist is the second estimate
for first-quarter gross domestic product, expected at 8:30 a.m.
ET. According to a Reuters poll, the world's largest economy
expanded by 1.3%, slightly less than the previously thought
1.6%.
Also on tap is jobless claims data, expected to show that
the number of Americans filing for State unemployment benefits
stood at 218,000, from 215,000 recorded the previous week.
The benchmark S&P 500 index is on track for its
biggest weekly drop in six, while the blue-chip Dow
closed at a four-week low on Wednesday.
Signs of persistent price pressures pushed the majority of
market expectations for at least a 25-basis-point rate cut to
the last two months of the year, according to the CME Group's
FedWatch Tool.
A central bank survey signaled that economic activity
continued to expand from early April through mid-May, but firms
grew more pessimistic about the future as demand weakened and
inflation continued to rise at a modest pace.
April's personal consumption expenditure report - the Fed's
preferred inflation gauge, due on Friday - could sway bets on
the timing of the central bank's first cut.
Hawkish comments from policymakers have also dampened risk
sentiment, and traders will assess remarks from New York Fed
President John Williams and Dallas Fed President Lorie Logan
later in the day.
At 5:37 a.m. ET, Dow e-minis were down 333 points,
or 0.86%, S&P 500 e-minis were down 23.5 points, or
0.44%, and Nasdaq 100 e-minis