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U.S. Index Futures Rise Ahead of Economic Data; Oil Prices Edge Higher

Fernanda T
Latest News
June 05 2024 7:34AM

U.S. index futures are showing gains in pre-market trading this Wednesday, with investors expressing optimism while awaiting new economic data and assessing recent corporate earnings results.

At 6:32 AM, Dow Jones futures (DOWI:DJI) rose 61 points, or 0.16%. S&P 500 futures advanced 0.23%, and Nasdaq-100 futures gained 0.47%. The 10-year Treasury yield stood at 4.342%.

In the commodities market, West Texas Intermediate crude for July rose 0.20%, to $73.40 per barrel. Brent crude for August increased by 0.26%, near $77.71 per barrel. Iron ore traded on the Dalian exchange fell 1.84%, to $113.84 per metric ton.

On Wednesday’s economic calendar, several significant indicators will be released, highlighting the private sector employment data for May, to be presented by ADP at 8:15 AM. Economists surveyed by Dow Jones predict the creation of 175,000 jobs in May.

Then, at 09:45 AM, the revised readings of the Purchasing Managers’ Indexes (PMI) related to May’s service sector activity, published by S&P Global, will be released. Shortly after, at 10:00 AM, the ISM Services Index for May will be released by ISM. Finally, at 10:30 AM, the U.S. Department of Energy (DoE) will publish the latest petroleum inventory status up to last Friday.

European markets are registering gains, with investor expectations focused on the upcoming European Central Bank (ECB) meeting tomorrow, the 6th. It is anticipated that the ECB may cut interest rates for the first time since 2019, ending the rapid rate hike cycle initiated post-pandemic due to rising inflation. However, attention is already shifting to the ECB’s future actions following this expected June cut.

Inditex, the owner of Zara, led the European benchmark with a rise after announcing a 7% increase in first-quarter sales, reaching 8.2 billion euros. Meanwhile, business activity in the eurozone grew for the third consecutive month in May, with stability in Germany, Spain, and Italy, while France showed a slight slowdown. In the UK, expansion also continued, albeit at a more moderate pace.

Asian markets closed on Wednesday without a clear direction, reflecting investor caution reacting to recent data indicating a slowdown in the U.S. economy. Despite a slightly positive close on Wall Street on Tuesday, Asian markets showed mixed performances.

In mainland China, the Shanghai SE index fell 0.83%, negatively impacted by declines in the real estate and retail sectors. Japan’s Nikkei also retreated, closing with a 0.89% decline. On the other hand, South Korea’s Kospi index rose 1.03%, and Australia’s ASX 200 advanced 0.41%. In Hong Kong, the Hang Seng Index had a slight drop of 0.10%.

U.S. stocks closed slightly higher on Tuesday. The Dow Jones increased by 140.26 points, or 0.36%, to 38,711.29 points, while the S&P 500 and Nasdaq grew by 0.15% and 0.17%, respectively. The decline in Treasury yields continued, reflecting weakness in the labor market, with job openings falling to 8.059 million in April. Yesterday, the gold and steel sectors performed poorly, while pharmaceuticals and commercial real estate showed strength.

Quarterly reports are scheduled to be presented before the market opens by Dollar Tree (NASDAQ:DLTR), Ollie’s Bargain Outlet (NASDAQ:OLLI), United Natural Foods (NYSE:UNFI), Hibbett (NASDAQ:HIBB), Land’s End (NASDAQ:LE), Campbell’s Soup (NYSE:CPB), Global Blue Group Holding (NYSE:GB), Thor Industries (NYSE:THO), DouYu International Holdings (NASDAQ:DOYU), Rev Group (NYSE:REVG), among others.

After the close, results from Lululemon Athletica (NASDAQ:LULU), ChargePoint (NYSE:CHPT), Victoria’s Secret (NYSE:VSCO), Five Below (NASDAQ:FIVE), Greif (NYSE:GEF), Semtech Corporation (NASDAQ:SMTC), Sprinklr (NYSE:CXM), Couchbase (NASDAQ:BASE), Smartsheet (NYSE:SMAR), ReNew Energy Global (NASDAQ:RNW), and more will be awaited.