U.S. stock index futures fell on Wednesday as investors awaited economic data and Federal Reserve Chair Jerome Powell's comments after strong economic data cooled predictions on interest rate reduction this year.
The tech-heavy Nasdaq (.IXIC) and the blue-chip Dow (.DJI) closed at two-week lows on Tuesday as Treasury yields rose to multi-month highs after stronger-than-expected manufacturing activity and factory orders data raised doubts about the Fed cutting interest rates thrice in 2024.
On Wednesday, the 10-year U.S. Treasury yield rose to 4.377% from 4.05%, a 2024 high. March private payrolls and services sector data later in the day may shed light on the U.S. economy.
Many U.S. central bank officials, including Powell, will speak that day. Powell will speak at 1210 ET (1610 GMT). According to CMEGroup's FedWatch tool, traders expect the Fed to decrease rates by 25 basis points in June at 62%, down from 64% a week earlier.
According to LSEG's rate likelihood tool, market participants now forecast two rate cuts this year, down from three a few weeks ago.
Even though strengthening economic data has raised investor uncertainties, Cleveland Fed Bank President Loretta Mester and San Francisco Fed Bank President Mary Daly said on Tuesday that cutting U.S. interest rates three times this year would be "reasonable".
On Friday, the Labor Department's jobs report is projected to reveal 200,000 new nonfarm positions in March after 275,000 in February. Dow e-minis fell 40 points, or 0.1%, S&P 500 e-minis fell 12 points, or 0.23%, and Nasdaq 100 e-minis down 62.5 points, or 0.34%, at 5:59 a.m. ET.
After missing first-quarter delivery projections, Tesla (TSLA.O) fell 0.8%, adding to its near 5% decline on Tuesday. Paramount Global (PARA.O), opens new tab rose 4.1% following a report suggested the media giant is considering a transaction with Skydance founder David Ellison.
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