Written by Johan M. Cherian and Sukriti Gupta
(Reuters) – U.S. stock index futures were trading flat on Tuesday ahead of a series of economic data, with investors looking for insight on the policies of the incoming Trump administration.
If the data shows signs of continued economic resilience, expectations for the pace of the Federal Reserve's monetary easing cycle this year will likely be tempered.
At the top of investors' radars are the November Recruitment and Turnover Survey and the Institute for Supply Management's December service activity data, both released at 10 a.m. ET. Nonfarm payrolls statistics are expected to be released later this week.
“Rising unemployment could pose a challenge for the Fed if inflation remains high,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.
“We will have to navigate between cutting too aggressively and risking a reawakening of higher inflation, while cutting too slowly could create new vulnerabilities in the economy. It is necessary to keep this in mind.”
As of 7:10 a.m. ET, the Dow E-mini was up 40 points, or 0.09%, the S&P 500 E-mini was up 5 points, or 0.08%, and the Nasdaq 100 E-mini was down 3.5 points, or 0.02%.
Meanwhile, the yield on the 10-year U.S. Treasury note has been rising since early December and is trading at 4.63%, near its highest level since May 2024.
Traders expect the Fed to take a dovish stance for the first time in June, as it expects to cut interest rates by as much as 50 basis points in 2025, according to CME Group's FedWatch tool. There is. The minutes of the December meeting are scheduled to be made public on Wednesday.
Investors will be watching Richmond Fed President Thomas Barkin's comments Tuesday as he and his colleagues warn about inflation risks and the need to keep borrowing costs contained over time.
In premarket trading, the S&P 500 and Nasdaq closed for the first time in a week on uncertainty after President-elect Donald Trump denied reports that his team was considering less aggressive tariff policies. The trade ended without reaching the high price.
Analysts say Trump's campaign promises, including tax cuts, tariffs and deregulation, could boost the economy if they come true, but could raise inflation and slow the pace of rate cuts. There is. His tariff plans, if implemented, could spark a trade war between the country's major partners.
Among stocks ahead of the market rally, Nvidia rose 2.4% a day after announcing new products and partnerships at a major annual technology conference in Las Vegas.
The AI pioneer is on track to overtake Apple as the most valuable publicly traded company if its pre-market profits hold up. Apple fell 1% after brokerage firm Moffett Nathanson downgraded the company's stock from “neutral” to “sell.”
