US futures move away from records with Fed decision leading the way

U.S. stock futures drifted lower on Tuesday, setting the stage for a pullback from record highs as investors awaited the start of a Federal Reserve meeting that is expected to indicate where interest rates will move. interest.

Futures for the tech-heavy S&P 500 () and Nasdaq 100 () both fell about 0.3% after hitting all-time closing highs. Dow Jones Industrial Average futures fell 0.4%.

Stocks have managed to advance amid market uncertainty about an economy that could be too hot or too cold for comfort. A string of inconclusive data has fueled skepticism about the likelihood of three rate cuts in 2024, as the Fed considered in March. Many investors now expect just one reduction before the end of the year.

The Fed’s two-day policy meeting that begins Tuesday is expected to end with borrowing costs held at their highest level in two decades. Investors will keep an eye out for clues on when a shift to cuts will take place, with September or November in the frame.

Learn more: How does the labor market affect inflation?

Investors calculating the odds of a rate cut are also eagerly awaiting May consumer price data, due Wednesday, given its crucial role in the Fed’s deliberations.

Meanwhile, shares of Apple (AAPL) remained in the red after losses following the iPhone maker’s big AI debut. On the other hand, shares of Eli Lilly (LLY) jumped after the drugmaker’s early treatment for Alzheimer’s disease gained unanimous support from a panel of FDA advisers.

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  • Diverging Views on Apple After AI Event

    There is no clear consensus on Apple (AAPL) stock after its AI event yesterday.

    The Street gives Apple a five on the technology itself, but what’s unclear is whether that’s enough to spur an upgrade cycle in iPhone stock prices.

    JP Morgan on the event:

    “We continue to expect the start of a device upgrade cycle for iPhones later this fall (largely FY25 for Apple), with the upgrade cycle likely culminating with the launch of iPhone 17 in 2025 (largely for FY26 volumes for Apple).”

    KeyBanc on the event:

    “We believe WWDC is a news-selling event where the bulls’ view, centered on an “iPhone super cycle” triggered by the integration of Apple’s intelligence (AI) into Apple products, will likely be seen as disappointing While WWDC introduces new software features to iOS, iPad OS, macOS and visionOS that are often useful, they are not, in our opinion, compelling for the average consumer to purchase a new device.

    The stock is down slightly in premarket trading.

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