By Shristi Achar A and Amruta Khandekar
U.S. stock index futures inched lower on Tuesday, as investors awaited comments from a host of Federal Reserve officials for clues on the interest rate path, while Zscaler shares fell on disappointing quarterly billings.
A rally on Wall Street in November came to a halt on Monday, with the markets taking a post-Thanksgiving pause and watching out for fresh policy cues after data signaling slowing inflation bolstered hopes the Fed was likely done raising interest rates.
Still, all three major indexes are on course for monthly gains after three straight months of losses. The rebound has also brought the S&P 500 within a very close range of its 2023 intra-day high.At 7:01 a.m. ET, Dow e-minis were down 10 points, or 0.03%, S&P 500 e-minis were down 4.75 points, or 0.1%, and Nasdaq 100 e-minis were down 15 points, or 0.09%.
"Markets are going through a 'one step forward, one step back' motion at present...despite investors increasingly taking the view that central banks are done with raising interest rates in the current cycle," said Russ Mould, investment director at AJ Bell in a note.
"The problem is that (the) representatives of major central banks do not want to draw a definitive line in the sand."
Multiple Fed policy voting members are scheduled to speak during the day, including Board Governors Christopher Waller and Michelle Bowman. Market participants will closely monitor their views as the focus shifts to the timing of a potential rate cut.
Money markets have almost fully priced in a pause in rate hikes at the December meeting, with expectations of at least a 25-basis point rate cut in May 2024 standing at nearly 50%, according to the CME Group's FedWatch Tool.
Personal consumption expenditure data - the Fed's preferred inflation gauge - and the "Beige Book", a snapshot of the U.S. economy, are due later this week, which will likely show how the economy is faring under tighter monetary conditions.
On the economic data front, the Conference Board's consumer confidence survey is due for release at 10:00 a.m ET, which is expected to show consumer confidence eased in November.
Shares of Zscaler fell 5.8% before the bell as the cloud security firm's quarterly billings fell short of some analysts' estimates, overshadowing its strong forecast and profit beat.
Boeing added 1.8% after RBC Capital Markets upgraded the aerospace company to "outperform" from "sector perform" and set a Street-high price target.
Affirm Holdings gained 2.9%, following its 12% jump in the previous session on Cyber Monday spending boost, and as Jefferies upgraded the payments platform to "hold."
U.S.-listed shares of PDD Holdings jumped 15.1% after the Chinese e-commerce firm beat third-quarter revenue estimates on a boost from heavy discounting.
(Reporting by Shristi Achar A and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)
