By Shashwat Chauhan and Purvi Agarwal
(Reuters) – U.S. stock index futures edged higher on Friday as investors reassessed the chances of a bigger interest rate cut by the Federal Reserve next week, while shares of aircraft maker Boeing (NYSE:) fell after factory workers went on strike.
Traders' expectations of a 50 basis point cut soared overnight and are now at 47% from 14% on Thursday, according to CME's FedWatch tool.
Former New York Fed President Bill Dudley said there was a strong case for a 50 basis point rate cut. Other media reports describing the decision as a “last-minute call” added to the uncertainty.
“Several articles in the Wall Street Journal and Financial Times suggesting a 50 basis point rate hike is still feasible has once again caused the market to reassess expectations,” Deutsche Bank analysts said.
“If prices remain where they are, this will be the first meeting in several years where there is serious uncertainty about the rate decision.”
The dollar weakened against major global currencies and U.S. Treasury yields fell across the board. [MKTS/GLOB]
Expectations strengthened on Thursday that the Fed will maintain its modest 25 basis point rate cut at its Sept. 17-18 meeting after a slight increase in the producer price index, released following the August consumer price index.
Wall Street's main stock indexes ended higher in the previous trading session, helped by gains in large-cap stocks, and all three major U.S. stock indexes maintained their weekly upward trajectory.
Investors will be analyzing the University of Michigan's September consumer confidence survey, due to be released around 10 a.m. ET (1400 GMT).
The Dow E-mini rose 74 points (0.18%), the E-mini rose 12 points (0.21%) and the E-mini rose 15.25 points (0.08%).
Futures tracking an index of economically sensitive small cap stocks rose 0.8%.
Boeing shares fell 2.9% in pre-market trading after factory workers on the US West Coast overwhelmingly rejected a contract agreement on Friday and staged an early morning walkout.
Photoshop maker Adobe (NASDAQ:) shares fell 8.1% after the company reported fourth-quarter profit that fell short of analysts' expectations, pointing to increased competition and weak demand for its AI-integrated editing tools.
Moderna (Nasdaq: ) fell 4.1%. At least two brokerages downgraded the vaccine maker's shares after the company pushed back its breakeven target by two years and said it expects 2025 sales to fall short of current fiscal year expectations.
U.S. stocks recorded their biggest outflow since April in the week ending Wednesday, Bank of America reported.
