Latest News

S&P 500 and Nasdaq Futures Advance on New Rate-Cutting Optimism

Futures linked to the S&P 500 index and the Nasdaq Index advanced early on Thursday. A day earlier, weaker than expected private payroll data had boosted hopes for rate cuts. Traders were bracing for a session with little data due to the U.S. Government shutdown.

Investors are still sensitive to any sign of policy easing. Rate-cutting optimism has been a major factor in the recent rally, which has pushed equities up to high valuations.

Investors are now relying on alternative data sources to fill the data vacuum left by the shutdown. This includes Wednesday's ADP National Employment Report which was weaker than anticipated.

Arnim Wooder, global macro-strategist at Easterly EAB, said that it would likely strengthen those in the Fed policymaking panel who think the labor situation warrants at least another cut.

The ADP report could be the last labor market data for some time. Traders interpreted the lower reading as sufficient to nudge the Fed towards a 25 basis point rate cut at the next meeting.

Kyle Rodda is a senior financial analyst at Capital.com. He said, "It appears that the U.S. economic system needs further policy support."

At 06:41 am. At 06:41 a.m. ET, Dow E Minis were down 26 or 0.06%. S&P 500 E Minis were up 11.25 or 0.17%. Nasdaq E Minis were up 92 or 0.37%.

On Wednesday, the benchmark S&P 500 index and blue-chip Dow ended at record highs.

The shutdown, which began on Wednesday, has already affected the weekly report on jobless claims, an important indicator of the labor market's health. This report was due to be released on Thursday.

In the past, shutdowns of government agencies have not had a significant impact on equity market. Investors are looking for signs of monetary ease, and the data vacuum is a risk.

Investors will also be analyzing the comments of Dallas Fed President Lorie Lo Logan on Thursday.

Tesla's stock rose 1.6% ahead of the release of its quarterly delivery report. Shares of Lithium Americas, listed on the NYSE, fell 4.6% following a downgrade by Canaccord Genuity.

Equifax and TransUnion credit bureaus fell 12.2% each and 11.3% respectively after FICO launched its program to allow mortgage lenders access to scores without having them rely on bureaus. FICO was up by 10.7%.

Advanced Micro Devices rose 2.9% following a report that Intel had begun early discussions to include the chipmaker as one of its foundry customers.

(source: Reuters)