By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -U.S. stock indexes were on track for a subdued open on Thursday after monthly producer prices rose as expected, with investors awaiting Federal Reserve Chair Jerome Powell’s comments later in the day for clues on the outlook for interest rates.
The producer price index (PPI) for final demand rose 0.2% on a monthly basis in October, in line with forecasts, though the annual rise of 2.4% was a touch higher than expectations.
Jobless claims dropped 4,000 to a seasonally adjusted 217,000 for the week ended Nov. 9, lower than forecast, in a sign of continued strength in the labor market.
“Investors appear to be taking stock now, unsure about increasing their exposure further,” David Morrison, senior market analyst at Trade Nation, said.
Traders slightly trimmed bets on an interest rate cut at the Fed’s December meeting, seeing a 76.1% chance of a 25-basis point reduction from 82% prior to the data, according to the CME FedWatch tool.
Bets on a December cut had increased after Wednesday’s consumer price index data, which was in line with forecasts.
Powell will provide an update on his economic outlook to business leaders in Dallas, a day after some Fed policymakers shifted their attention back to inflation risks as they weighed when, and how fast and far, to cut interest rates.
Fed governor Adriana Kugler said on Thursday the central bank has made considerable progress in working to achieve its job and inflation goals, though noting challenges in bringing inflation back to target.
Policies under President-elect Donald Trump’s administration are widely expected to add to inflationary pressures.
Changing inflation expectations are clearly visible in the bond market, where the has ticked up to its highest since July, which could limit gains for rate-sensitive equities.
Dow E-minis were up 76 points, or 0.17%, E-minis were down 1.75 points, or 0.03%, and E-minis were down 16.25 points, or 0.08%.
Meanwhile, Walt Disney (NYSE:) soared 9% after reporting quarterly earnings that topped Wall Street’s estimates.
Shares of cryptocurrency-focused companies rose as bitcoin continued to climb on hopes of favorable policies under Trump. Coinbase Global (NASDAQ:) gained 2.6%, miner MARA Holdings rose 2.2% and bitcoin buyer MicroStrategy was up 3.2% in premarket trading.
Tapestry (NYSE:) gained 9.5% after the Coach parent said it was terminating its $8.5 billion deal for Michael Kors owner Capri Holdings (NYSE:) after the deal was blocked by a U.S. judge. Capri’s shares fell 5.6%.
Remarks from Fed official John Williams are expected later in the day.
