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

Futures for the S&P 500 index and Nasdaq index rose on Thursday morning, after a weaker than expected private payrolls report boosted hopes for rate cuts. Traders braced themselves 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 expected.

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 a while, and traders interpreted the lower reading as sufficient to convince the Fed to cut rates by 25 basis points during its 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 05.06 a.m. At 05:06 a.m. ET, Dow eminis had fallen 16 points or 0.03%. U.S. S&P500 Eminis rose 10.75 points or 0.16%. Nasdaq100 Eminis gained 88.5 points or 0.35%.

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 1.5% ahead of its quarterly delivery report. Shares of Lithium Americas, listed on the NYSE, fell 2.4% following a downgrade by Canaccord Genuity.

Equifax and TransUnion credit bureaus fell by 11.1% and 7.1% respectively after FICO launched its program, which could allow mortgage lenders to access credit scores without having to rely on bureaus. FICO rose 1.2%. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, with Niket Nishant from Bengaluru)

(source: Reuters)