Futures tracking Wall Street's indexes were largely subdued on Friday as investors were on edge in the run up to Federal Reserve Chair Jerome Powell's comments that are expected to hold clues on the interest rate path.
This come after the S&P 500 and Nasdaq finished November with their biggest monthly gain since July 2022, while the Dow Jones rallied to close at its highest level since January 2022.
Data showing slowing U.S. consumer spending, dovish comments from some Fed officials and a strong earnings season led the equity indexes to have a stellar November.
The recent slew of economic data, including Thursday's personal consumption expenditure index, signalled easing inflation in the world's largest economy, underscoring hopes of the central bank would now halt its interest rates hiking cycle.
Not only a pause in rate hikes has been fully priced in for the upcoming December policy meeting, traders also see a nearly 54% chance of at least a 25 basis point rate cut in March 2024 and about 83% chance in May, according to CME Group's FedWatch tool.
"Data yesterday adds weight to the interest-rate cutting narrative, but does throw up another challenge," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown in a note.
"Lower interest rates are introduced in times of economic challenges, and the size and shape of an incoming recession – should there be one – does have the ability to derail gains."
Market participants now await policy comments from Powell in a fireside chat, due at 11:00 a.m. ET, for clues on the monetary policy trajectory.
Other Fed officials, including Fed Governors Lisa Cook and Michael Barr and Chicago Fed President Austan Goolsbee are also scheduled to speak during the day.
Also in focus would be the S&P Global and ISM's manufacturing purchasing managers' index (PMI) data for November, both scheduled for release after the opening bell.
Tesla underperformed other megacap stocks, down 0.9% before the bell, as the EV maker priced its Cybertruck above its initial forecast.
At 5:34 a.m. ET, Dow e-minis were up 62 points, or 0.17%, S&P 500 e-minis were up 3 points, or 0.07%, and Nasdaq 100 e-minis were down 7.25 points, or 0.05%.
Among other stocks, U.S.-listed shares of Alibaba slipped 1.4% premarket after Morgan Stanley downgraded the e-commerce giant, citing slower turnaround in customer management revenue (CMR).
Ulta Beauty rose 10.8% after the cosmetics retailer raised the lower end of its annual net sales forecast and named Paula Oyibo its new chief financial officer.
Automation software firm UiPath jumped 13.8% on beating third-quarter revenue estimates.
(Reporting by Shristi Achar A in Bengaluru)
