Wall St Futures Edge Higher On Easing Inflation Hopes

U.S. stock index futures edged higher on Thursday, ahead of a reading later in the day that is expected to add to the narrative of easing inflation and an end to the Federal Reserve’s rate hiking cycle.

The three main indexes are on course for their best November since 2020, with the S&P 500 (.SPX) and the tech-heavy Nasdaq (.IXIC) also poised for their biggest month since July 2022.

Signs of cooling price pressures, dovish pivot in comments from some Fed officials and strong quarterly earnings have all driven equities to rally in the last couple weeks.

On Wednesday after some conflicting policy rate remarks from multiple Fed officials, Wall Street ended marginally lower, though a recent spate of economic data signaling slowing inflation have kept alive the hopes of peaking interest rates.

All eyes would be on the personal consumption expenditure (PCE) index- the Fed’s preferred inflation gauge- for October, due at 8:30 a.m. ET, which is expected to show inflation eased in the previous month.

“The personal consumption expenditures index could help determine if Wall Street sees out a November to remember with a bang or a whimper,” said Russ Mould, investment director at AJ Bell in a note.

“Data points and commentary from the Federal Reserve have largely reinforced the idea that the current rate hiking cycle is at its end.”

Though a pause in rate hikes has been fully priced in for the upcoming December meeting, focus has increasingly shifted towards potential rate cuts next year, with traders pricing in a 46.3% chance of at least a 25-basis point cut in as soon as March 2024, according to CME Group’s FedWatch tool.

Also on the radar is the weekly jobless claims numbers for the week ended Nov. 25 and the Chicago purchasing managers’ index (PMI) for November, both due later in the day.

Dow component Salesforce (CRM.N) jumped 9.2% before the bell as the cloud-based software firm raised its annual profit forecast and third-quarter results beat.

At 5:34 a.m. ET, Dow e-minis were up 160 points, or 0.45%, S&P 500 e-minis were up 9.25 points, or 0.2%, and Nasdaq 100 e-minis were up 35 points, or 0.22%.

Among other stocks, data cloud company Snowflake (SNOW.N) added 9.0% premarket on forecasting fourth quarter product revenue above street estimates on artificial intelligence driven demand.

Pinterest (PINS.N) and Snap Inc (SNAP.N) rose 3.5% and 3.0% respectively, after Jefferies upgraded the social media firms to “buy” from “hold.”

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