By Shashwat Chauhan and Lisa Pauline Matakkal
(Reuters) – Wall Street futures edged higher ahead of economic data releases as the Federal Reserve could cut interest rates next week.
Most large-cap and growth stocks were modestly higher in premarket trading, with Google parent Alphabet rising more than 1 percent.
The producer price index and weekly jobless claims report are both scheduled to be released at 8:30 a.m. ET.
Jobless claims numbers will be closely watched as the Federal Reserve scrutinizes the health of the labor market, with economists polled by Reuters expecting them to reach 230,000.
A series of weakening employment and economic growth indicators over the past few weeks had raised hopes of a larger-than-usual 50 basis point interest rate cut by the Federal Reserve, but those hopes have all but evaporated.
Following Wednesday's inflation report, traders see an 87% chance that the Fed will cut interest rates by 25 basis points at its Sept. 17-18 meeting, which would be the first cut since March 2020, according to CME's FedWatch tool.
“Our base case forecasts a 25 basis point cut in the federal funds rate at the September FOMC meeting, followed by two further 50 basis point cuts at the November and December FOMC meetings,” Wells Fargo analysts said.
“We believe that the expected 225 basis points of monetary policy easing over the next nine months or so will be sufficient to sustain this economic expansion.”
Nvidia, which rose 8.2% on Wednesday after reports that the U.S. government was considering allowing the company to export advanced semiconductor chips to Saudi Arabia, looked set to extend its gains and was up 0.7% before the close.
The S&P 500 E-mini rose 9.25 points, or 0.17%, the Nasdaq 100 E-mini rose 21.75 points, or 0.11%, and the Dow E-mini rose 77 points, or 0.19%.
Futures for the Russell 2000 Index of economically sensitive small-cap stocks rose 0.5%.
On Wednesday, gains in the technology sector offset investor disappointment after the inflation data.
The tech-heavy Nasdaq closed up more than 2%, while the S&P 500 closed up 1% in volatile trading. The benchmark index was down 1.5% intraday.
The U.S. Consumer Price Index rose slightly in August, but underlying inflation held up somewhat better. The core index, which excludes volatile food and energy items, rose 0.3%, versus the expected 0.2% increase.
Vaccine maker Moderna Inc. plunged 9% in premarket trading on Thursday after the company forecast sales of $2.5 billion to $3.5 billion next year, below analysts' expectations.
(Reporting by Shashwat Chauhan and Lisa Matakal in Bengaluru; Editing by Shaunak Dasgupta)
