Market Watch: Dow futures contract gained 0.2%, S&P 500 futures increased 0.1%, and Nasdaq 100 futures advanced 0.1%.
Stock futures rise amid labor demand slowdown in the US economy, while Samsung shares surge amid Nvidia’s CEO’s comments on supply.
 ADP private payrolls
Traders will analyze employment figures this week, including the nonfarm payrolls report. ADP estimates private employers hired 173,000 workers in May, indicating a cooling US jobs market. The Fed’s 25 basis-point reduction in September is predicted to be around 65% likely, following a spike in interest rates since March 2022.
Samsung gains
Samsung Electronics shares surged on Wednesday due to expectations of supply from artificial intelligence chipmaker Nvidia. Nvidia Chief Executive Jensen Huang said Samsung is working to certify its high-bandwidth memory chips, which would enable Samsung to supply Nvidia. Samsung is racing to catch up to rival SK Hynix in mass producing HBM chips for AI models like OpenAI’s ChatGPT.
Chinese services activity grows
China’s services sector experienced growth in May, according to private purchasing managers’ index data. The Caixin services PMI rose to 54.0, above estimates of 52.6 and 52.5 in April. New business, improved local and overseas demand, boosted the industry for a 17th consecutive month. The data contrasts with official PMI data, which showed slower growth in non-manufacturing activity.
Economic Calendar
- 7:00Â MBA Mortgage Applications
- 8:15Â ADP Employment Report
- 9:45Â PMI Composite Final
- 10:00Â ISM Services Index
- 10:30Â EIA Petroleum Inventories
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Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow, the benchmark and tech-heavytouched record marks last week.
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow,
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
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MFitch Ratings has downgraded China’s credit rating outlook to “Negative” from “Stable” due to concerns over growing public debt and slowing growth in the world’s second-largest economy. The agency affirmed China’s rating at A+, citing increasing risks to China’s public finance outlook. Concerns over slowing economic growth have grown in recent months, with Fitch expecting gross domestic product growth to fall to 4.5% in 2024.
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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.
U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.