Fed Watch: US Stock Futures Reflect Caution Ahead of Crucial Remarks from Federal Reserve

Nov 28 (Reuters) – U.S. stock index futures experienced a slight downturn on Tuesday as investors eagerly awaited comments from various Federal Reserve officials regarding the future trajectory of interest rates. Concurrently, Zscaler shares faced a decline due to quarterly billings falling short of expectations.

The momentum from Wall Street’s November rally took a breather on Monday, with markets pausing post-Thanksgiving. Investors remained attentive to potential shifts in policy following data indicating a slowdown in inflation, fostering optimism that the Fed might halt interest rate hikes.

Despite this, all three major indexes are on track for monthly gains, marking a turnaround after three consecutive months of losses. The S&P 500, in particular, is positioned close to its intra-day high for 2023.

As of 7:01 a.m. ET, Dow e-minis were down 10 points (0.03%), S&P 500 e-minis down 4.75 points (0.1%), and Nasdaq 100 e-minis down 15 points (0.09%).

Russ Mould, investment director at AJ Bell, remarked, “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.”

Scheduled speeches from multiple Fed policy voting members, including Board Governors Christopher Waller and Michelle Bowman, were closely monitored for insights on the timing of a potential rate adjustment.

Market expectations included a likely pause in rate hikes at the December meeting, with nearly a 50% anticipation of at least a 25-basis point rate cut in May 2024, according to the CME Group’s FedWatch Tool.

This week, crucial economic indicators, such as personal consumption expenditure data and the “Beige Book,” were expected to shed light on the U.S. economy’s performance under tighter monetary conditions.

In addition, the Conference Board’s consumer confidence survey, set for release at 10:00 a.m. ET, was anticipated to reveal a softening in consumer confidence for November.

Ahead of the opening bell, Zscaler shares declined by 5.8%, attributed to quarterly billings falling short of analysts’ expectations, despite a positive forecast and profit beat.

Boeing saw a 1.8% increase after RBC Capital Markets upgraded the aerospace company to “outperform,” setting a Street-high price target.

Affirm Holdings rose by 2.9% on the heels of a 12% surge in the previous session driven by Cyber Monday spending. Jefferies upgraded the payments platform to “hold.”

U.S.-listed shares of PDD Holdings soared by 15.1% following the Chinese e-commerce firm’s surpassing of third-quarter revenue estimates, boosted by substantial discounting.