Health insurer shares fell sharply on Tuesday, hurting U.S. stock index futures as investors expected further economic data and Federal Reserve remarks on interest rate cuts.
The U.S. government's unchanged Medicare Advantage reimbursement rates signaled that insurers' margins would likely remain under pressure next year, sending shares of UnitedHealth (UNH.N), CVS Health (CVS.N), and Humana (HUM.N) down 3.8% to 8.7% in premarket trading.
The Dow (.DJI) and S&P 500 (.SPX) fell on Monday as stronger-than-expected manufacturing data cast doubt on the Fed's three interest rate reduction projected at the last policy meeting.
February factory orders and job vacancies are due Tuesday. Friday's U.S. non-farm payrolls data is likely to show job gains slowed in March but average salaries rose.
According to CMEGroup's FedWatch tool, traders expect the Fed will decrease rates by 25 basis points in June and again in 2024. Dow down six-tenths, S&P 500 fell two-tenths, and Nasdaq rose one-tenth.
Later today, New York Fed President John Williams, Cleveland Fed President Loretta Mester, and San Francisco Fed President Mary Daly will speak. Dow e-minis fell 119 points, or 0.3%, S&P 500 e-minis fell 6.5 points, or 0.12%, and Nasdaq 100 e-minis down 29.5 points, or 0.16%, at 5:53 a.m. ET.
On the heels of the S&P 500's greatest first quarter in five years and all three main indexes setting record highs, spurred by excitement about artificial intelligence and prospects of easing monetary policy, the new quarter started quiet.
Calvin Klein-parent PVH Corp's shares (PVH.N) fell 23.4% after the retailer anticipated an 11% loss in first-quarter revenue.
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