(Reuters) – U.S. stock index futures rose on Tuesday, with technology and semiconductor stocks poised to extend Monday’s rally as investors awaited testimony from Federal Reserve Chairman Jerome Powell for clues on the path of monetary policy.
The S&P 500 and Nasdaq advanced to close at record highs Monday, lifted by rising chip stocks as the Philadelphia semiconductor index hit a more than two-week high.
It’s the 35th time this year that the benchmark index has set a new closing record, as strong gains in AI-related and technology stocks kept equity sentiment buoyant, offsetting uncertainty over the central bank’s rate-cutting plans.
Intel shares jumped 3.8% in premarket trading Tuesday after gaining more than 6% in the previous session, while AI chip favorite Nvidia rose 1.1% and Marvell Technology added 1.0%.
Investors will be closely watching Powell’s testimony before Congress later in the day to gauge how the central bank assesses recent economic data that point to a slowing labor market, among other signs of potential economic weakness. The testimony, followed by questions from lawmakers, is scheduled to begin at 10 a.m. ET.
“We expect Mr Powell’s comments in the Q&A session to be balanced to slightly dovish, given the resumption of disinflation progress and signs of slowing economic activity and employment, albeit gradual,” Unicredit analysts said in a note.
Policymakers’ own projections show they expect only one rate cut this year, but markets are sticking with a 50 basis point easing, pricing in a nearly 74% chance of a 25 basis point cut at the Fed’s September meeting, according to the CME’s FedWatch.
These bets have increased by less than 50% from a month ago.
Rate-sensitive large-cap stocks Microsoft, Amazon.com, Alphabet and Meta Platforms rose between 0.3% and 0.5%.
“The market is continuing its uptrend and with the prospect of rate cuts, I think that could continue for some time,” said Jeremy Siegel, senior economist at WisdomTree.
Crucial inflation data are also due this week. The consumer price index released on Thursday and the producer price index released on Friday will provide insight into whether inflationary pressures are easing in the world’s largest economy.
Investors are also eagerly awaiting the start of second-quarter corporate earnings season this week. Analysts on average expect S&P 500 companies to increase their overall earnings per share by 10.1% in the second quarter, compared with an 8.2% increase in the first quarter, according to LSEG I/B/E/S data.
As of 5:53 a.m. ET, Dow e-minis were up 47 points, or 0.12%, S&P 500 e-minis were up 13.75 points, or 0.24%, and Nasdaq 100 e-minis were up 83.25 points, or 0.40%.
Among single-moving stocks, shares of Tempus AI rose 3.9% after JPMorgan initiated coverage of the stock with an overweight rating.
Eli Lilly shares gained 0.7% after a data analysis report released Monday showed its Mounjaro treatment leads to faster and greater weight loss…
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