US stock futures rise with Powell speech, rate cuts in focus

Investing.com-- U.S. stock index futures rose in evening deals on Thursday with focus turning to an address by Federal Reserve Chair Jerome Powell for more cues on the bank’s plan to cut interest rates.

Futures rose after Wall Street logged deep losses during the session, as investors were unnerved by data showing the U.S. labor market was in a much worse position than initially expected. Investors also pivoted out of heavyweight technology stocks, as caution grew ahead of key earnings from market darling NVIDIA Corporation (NASDAQ:NVDA) next week.

A rebound in the dollar and Treasury yields also pressured stock markets. 

S&P 500 Futures rose 0.2% to 5,603.50 points, while Nasdaq 100 Futures rose 0.3% to 19,628.25 points by 19:14 ET (23:14 GMT). Dow Jones Futures rose 0.1% to 40,881.0 points.

Powell set to speak at Jackson Hole, rate cut cues in focus 

Fed Chair Powell is set to speak at the Jackson Hole Symposium on Friday, and is widely expected to offer more cues on the central bank’s plans to begin cutting interest rates.

While it is unlikely that Powell will explicitly flag a September rate cut, markets are pricing in with certainty that the central bank will trim rates next month. Traders are split over a 25 and 50 basis point reduction, CME Fedwatch showed. 

Recent signs of a cooling U.S. economy- especially the labor market, drove increased expectations of lower interest rates. Data earlier this week showed a sharp downward revision in payrolls for the year to March 2024, indicating that any declines in payrolls seen in recent months were from a much lower base than initially expected.

The reading ramped up concerns that a sharply cooling labor market will put the economy on course for a hard landing and a potential recession. 

Wall St hit by tech losses as yields rebound 

Wall Street indexes clocked deep losses on Thursday, weighed chiefly by losses in technology stocks as traders rotated into more rate-sensitive sectors.

A rebound in the dollar and Treasury yields also pressured growth stocks.

The S&P 500 fell 0.9% to 5,570.64 points, while the NASDAQ Composite fell 1.6% to 17,626.07 points. The Dow Jones Industrial Average fell 0.4% to 40,712.78 points. 

Chipmaker NVIDIA Corporation (NASDAQ:NVDA) slid 3.7% on Thursday, although it rose slightly in aftermarket trade, with focus turning to its quarterly earnings due next week. 

Investors will be watching to see whether the company can justify an artificial intelligence-fuelled spike in valuation over the past year, which catapulted Nvidia to becoming the third-largest company on Wall Street.