Wall St futures edge higher on rate cut hopes, data in focus

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Dec 3 (Reuters) – U.S. stock index futures edged higher on Wednesday as investors priced in a high chance that the Federal Reserve will cut interest rates this month and awaited a fresh set of economic data.

Wall Street rebounded on Tuesday from a wobbly start to December as traders digested losses in the crypto and bond markets and weighed a barrage of delayed data and mixed signals on monetary policy from Fed officials.

A report that the Trump administration had abruptly canceled interviews with finalists for the Fed chair role firmed up the view that Kevin Hassett – seen as a U.S. interest rate cutter – will replace Jerome Powell next May.

Data on manufacturing activity and holiday shopping sales have painted a mixed picture of the economy, although traders have welcomed signs that several influential policymakers have taken a more dovish stance on interest rates in recent days.

Expectations for a 25-basis-point cut at next week’s Federal Reserve meeting have risen to 87% from 63% a month earlier, according to CME’s FedWatch Tool.

The Fed’s industrial output figures for September are due later in the day, while a separate report by ADP Research Institute is forecast to show the private sector added 10,000 jobs in November, down from 42,000 in the previous month.

The official employment reports for October and November will not be released until after the Fed’s meeting next week, putting more focus on private-sector surveys in the meantime.

An ISM survey on services activity is also expected later on Wednesday, with attention on the prices-paid subindex ahead of Friday’s personal consumption expenditures data, the Fed’s preferred inflation gauge.

At 05:33 a.m. ET, Dow E-minis were up 91 points, or 0.19%, S&P 500 E-minis were up 11.5 points, or 0.17% and Nasdaq 100 E-minis were up 27 points, or 0.11%.

In premarket trading, Marvell Technology <MRVL.O> jumped 10.1% after the chipmaker said it will buy semiconductor startup Celestial AI in a deal worth $3.25 billion and gave a bullish forecast for its next fiscal year.

Microchip Technology <MCHP.O> rose 2.9% after the chipmaker raised its expectations for third-quarter net sales and earnings per share, driven by strong bookings.

American Eagle Outfitters <AEO.N> raised its annual comparable sales forecast, betting on marketing-driven demand for its apparel and accessories during the holiday season, sending its shares up 12.9%.

Earnings reports from Macy’s and Dollar Tree due later in the day could also offer insights into the health of the American consumer.

Crypto stocks such as Strategy and Bit Digital gained 2.8% and 4.5%, respectively as bitcoin recovered 1.9% and touched a two-week high. 

CrowdStrike <CRWD.O> fell 2% after reporting quarterly results and forecasts.

(Reporting by Johann M Cherian in Bengaluru; Editing by Tasim Zahid)