© Reuters. FILE PHOTO: People walk around the Financial District near the New York Stock Exchange (NYSE) in New York, U.S., December 29, 2023. REUTERS/Eduardo Munoz/File Photo
By Johann M Cherian and Ankika Biswas
(Reuters) -Wall Street’s main stock indexes were on course for a subdued open on Wednesday as investors avoided big bets ahead of inflation reports and earnings from major lenders later in the week.
Equities have remained range-bound since the turn of the year, as investors reassess their expectations of the timing and the pace of monetary policy easing following contrasting economic data and mixed signals from Federal Reserve officials.
All eyes are now on the December consumer and producer inflation reports, due on Thursday and Friday, respectively, which could help determine the monetary policy trajectory for the central bank.
“Unless you see inflation come in higher than expected, which is unlikely, there is going to be an inclination to move sooner rather than later (on rate cuts),” said Thomas Hayes, chairman at Great Hill Capital.
Market participants have scaled back expectations for at least a 25-basis-point rate cut in March, and currently see a near 66% chance, down from around 86% in the last week of 2023, as per the CME FedWatch Tool.
Investors will closely monitor comments by New York Fed President John Williams – considered a neutral voice on policy by analysts – scheduled to speak later in the day.
Meanwhile, on Friday, banking giants JPMorgan Chase (NYSE:), Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits, as they set money aside to cover souring loans and paid more to depositors.
The lenders slipped between 0.3% and 0.5% in premarket trading on Wednesday.
“The secret to happiness is low expectations, and that’s exactly what we have going into earning seasons,” Hayes added.
At 8:46 a.m. ET, were down 9 points, or 0.02%, were down 1.75 points, or 0.04%, and were down 8 points, or 0.05%.
Chip stocks Nvidia (NASDAQ:), Advanced Micro Devices (NASDAQ:) and Intel (NASDAQ:) gained between 0.2% and 0.8% after TSMC, the world’s largest contract chipmaker, beat fourth-quarter revenue expectations.
Crypto stocks including Coinbase (NASDAQ:), Bitfarms and Riot Platforms (NASDAQ:) fell between 2.8% and 3.0%, as prices of the world’s most valued cryptocurrency, , dipped after the U.S. securities regulator said a fake social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds.
Boeing (NYSE:) inched up 0.3%, recovering from a 9.3% tumble in the last two sessions. CEO Dave Calhoun acknowledged errors by the U.S. planemaker as more than 170 jets remained grounded for a fourth day.
Lennar (NYSE:) rose 2.2% after the homebuilder increased its annual dividend to $2 per share from $1.50, and share buyback program by $5 billion.
Dow Inc (NYSE:) slipped 0.7% after Deutsche Bank downgraded the chemicals firm to “hold” from “buy”.
DocGo dropped 14.0% after Fuzzy Panda Research revealed short position in the health services company’s stock.
Intuitive Surgical (NASDAQ:) climbed 5.0% after the medical device maker’s preliminary fourth-quarter revenue beat estimates.