US pre-open: Futures higher after Tuesday's minutes-fuelled losses

(Sharecast News) - Wall Street futures were mostly in the green ahead of the bell on Wednesday after minutes of the latest monetary policy meeting showed that monetary officials were in no rush to start cutting interest rates. As of 1245 GMT, Dow Jones futures were up 0.09%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.23% and 0.41% firmer, respectively.

The Dow closed 62.75 lower on Tuesday as minutes from the Federal Open Market Committee's meeting on 1 November revealed discussions about leaving policy "at a restrictive stance for some time" until inflation moves down sustainably to the 2% target, with the first interest rate cut predicted to come in September 2024.

"The Fed has not completely ruled out additional rate hikes, noting that further tightening would be appropriate 'if' progress towards the 2% inflation target was 'insufficient', said Michael Pearce, economist at Oxford Economics. "However, the minutes made clear that the Fed is taking a cautious approach, with participants generally judging that the risks had 'become more two-sided'."

As far as Wednesday was concerned, mortgage applications grew 3% week-on-week as interest rates continued to drop, according to the Mortgage Bankers Association. The growth in applications comes as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 7.41% from 7.61%.

Still to come on the macro front, jobless claims and durable goods orders data will be published at 1330 GMT, while the University of Michigan's November consumer sentiment index will be published at 1500 GMT.

In the corporate space, chipmaker Nvidia posted third-quarter adjusted earnings and revenue that beat expectations after the close, but also warned that export restrictions on China would impact the group in the fourth quarter, while agricultural equipment maker Deere fell 6% in pre-market trading after issuing weaker-than-expected guidance for FY24.

Scope Markets' Joshua Mahony said: "As US earnings season draws towards it conclusion, Nvidia struggled to take advantage of the impressive earnings and revenue beat that saw their income up over 200% in the past year alone. Much like many of their tech peers, the company saw limited gains despite top and bottom-line outperformance, with their continued strength instead overshadowed by concerns around their Q4 performance.

"Much like Burberry and Walmart last week, the speculation over potential weakness in China towards year-end does provide a lag that has held back valuations for now. With 96% of the S&P 500 having reported, the influence of corporate data looks to wane from here on in. Next week does see a continued tech focus, with Salesforce, Dell, Workday, and Snowflake earnings due."

Reporting by Iain Gilbert at Sharecast.com