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Futures ease ahead of economic data, megacap growth stocks slide

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LA Post: Futures ease ahead of economic data, megacap growth stocks slide
Reuters
Reuters
March 05, 2024

(Reuters) - U.S. stock index futures dipped on Tuesday as investors awaited a slew of economic data and several key events this week, including appearances from Federal Reserve Chair Jerome Powell.

Investors eyed U.S. services sector data for February and factory orders data for January due at 10:00 a.m. ET that could provide further insight into the health of the U.S. economy.

The benchmark S&P 500 hit a fresh intraday record high on Monday before closing slightly lower as investor focus turned to Powell's testimony before lawmakers on Wednesday and Thursday that could offer more cues on the Fed's monetary policy path.

"In this testimony, Powell will likely ask for more patience regarding the timing of the first rate cut, he will probably say that inflation is on the right path but that they don’t want to lower their guard too early," said Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.

Traders see a 65.5% chance of the first rate cut this year arriving in June, as per CME Group's FedWatch tool.

The Fed is under no urgent pressure to cut interest rates given a "prospering" economy and job market, Atlanta Fed President Raphael Bostic said in remarks on Monday, adding to worries about rates being higher-for-longer.

Investors will be closely looking at speeches by other Fed policymakers including Vice Chair for Supervision Michael Barr, who is due to speak later in the day.

At 04:40 a.m. ET, Dow e-minis were down 54 points, or 0.14%, S&P 500 e-minis were down 15.25 points, or 0.3%, and Nasdaq 100 e-minis were down 116.25 points, or 0.64%.

Apple slid 1.6% in premarket trading after a research report showed iPhone sales in China fell 24% year-on-year in the first six weeks of 2024 as the U.S. company faced increased competition from domestic rivals such as Huawei.

Other megacap growth and technology stocks also declined, with electric vehicle maker Tesla and AI darling Nvidia down 2.1% and 0.9%, respectively.

Advanced Micro Devices fell 2.8% after a report that the chipmaker hit a U.S. government roadblock in its efforts to sell an artificial intelligence chip tailored for the Chinese market.

Microstrategy shed 8.6% after the bitcoin development company announced a private offering for $600 million in convertible senior notes, with proceeds to be used to buy bitcoin.

Other major cryptocurrency-linked firms such as Riot Platforms and Marathon Digital fell 5.6% and 7.6%, respectively, as bitcoin eased.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel)

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