Dec 17 (Reuters) – U.S. stock index futures inched higher on Wednesday as investors awaited more economic data to gauge the path for monetary policy and monitored geopolitical tensions in Venezuela that sent oil prices higher.
Commentary from a number of influential Federal Reserve officials such as Governor Christopher Waller and New York President John Williams is expected later in the day that could offer more clarity on monetary policy.
U.S. equities had a volatile session on Tuesday, with the benchmark S&P 500 touching a three-week low after a key jobs report failed to offer enough clarity on the health of the labor market and analysts pointed to the likelihood of data distortion due to the recent government shutdown.
Traders held on to expectations for two 25-basis-point rate cuts next year, according to data compiled by LSEG, with the first one expected in June – a month after a new Fed Chair is likely to be appointed.
Reports said that White House economic adviser Kevin Hassett’s candidacy for the role received pushback from those close to U.S. President Donald Trump and the investment community such as JPMorgan Chase’s Jamie Dimon and Citadel’s Ken Griffin, given his strong support for interest rate cuts.
“The markets seem to be implying a likely short pause in the cutting cycle from the Fed, which aligns with the guidance the central bank provided last week,” said Kyle Rodda, senior financial market analyst at Capital.com.
The next significant report will be Thursday’s consumer inflation data by the Commerce Department.
At 5:16 a.m. ET, Dow E-minis were up 107 points, or 0.22%, S&P 500 E-minis were up 23 points, or 0.34% and Nasdaq 100 E-minis were up 95 points, or 0.38%.
Meanwhile, oil stocks including Halliburton, SLB and Occidental Petroleum rose 1% each in premarket trading, tracking a 2% climb in crude prices as Trump ordered a “blockade” of all sanctioned oil tankers entering and leaving Venezuela.
Tuesday saw the S&P 500’s energy sector mark its biggest daily drop since early April on prospects that a Russia-Ukraine peace deal was imminent. Both Russia and Venezuela are major oil producers.
U.S.-listed precious metal miners such as First Majestic and Harmony Gold added about 3% each, tracking higher gold and silver prices, with silver topping $65 for the first time.
With two weeks left for the year, Wall Street is set to log its third straight set of annual gains, buoyed by rate cut expectations and enthusiasm over artificial intelligence.
However, concerns over tech valuations have added an element of caution this quarter, reflected by the rotation into small caps and other areas of the market including healthcare and banks.
Amazon.com rose 1.4% after a report that the company was in talks to invest about $10 billion in ChatGPT maker OpenAI.
The saga around the bid for Warner Bros Discovery entered a fresh twist after a Reuters report suggested the legacy studio is likely to reject Paramount’s $108.4 billion offer. Shares of Warner and Paramount dropped about 1% each, while Netflix gained 1.7%.
Earnings reports from General Mills and Jabil are expected before markets open.
(Reporting by Johann M Cherian in Bengaluru; Editing by Maju Samuel)
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