Stock futures were edging lower on Tuesday, as investors opted to lock in some profit ahead of a flurry of economic data that ought to give the market a better sense of where interest rates may be headed.
Futures tracking the Dow Jones Industrial Average slipped 81 points, or 0.2%. S&P 500 futures were also down 0.2%, and contracts tied to the tech-heavy Nasdaq 100 fell 0.4%.
The three major indexes rallied on Monday, with the Nasdaq notching its best day since May, after two more Federal Reserve policymakers signaled they would support a rate cut at the central bank’s Dec. 9-10 policy meeting. Traders are pricing in an 81% chance that the Fed lowers borrowing costs by a quarter point, up from 50% a week ago, according to the CME FedWatch tool.
“In large part, [the gains were] thanks to growing anticipation of another Fed rate cut in two weeks’ time,” Deutsche Bank macro strategist Jim Reid said. “But there was also support from a rebound in tech optimism as well as headlines pointing to progress on the Ukraine peace talks.”
While investors are now pretty certain of a December rate cut, shutdown-delayed economic data could shift the odds, with September retail sales and producer-price index figures due out Tuesday.
The yield on the 10-year Treasury note ticked up 1 basis point to 4.04% in early trading. The dollar was flat against a weighted basket of its peers, and gold futures climbed 0.7%. Bitcoin was up 0.5% to $87,394 over the past 24 hours.