US equity futures moved higher on Tuesday morning with the gains in technology and growth stocks leading the surge. Investors are looking ahead to key economic data that could signal the Federal Reserve’s next monetary policy.
Tesla Inc rose 1% in pre-market trading as sales of its China-made electric vehicles surged in March. The company is bouncing back after 6% decline in its stocks on Monday following data on its March-quarter deliveries. Tech giants Microsoft Corporation and Meta Platforms Inc went up 0.7% and 0.6%, respectively, which helped the Nasdaq futures to outperform the rest of the futures.
Oil prices have gone up due to the OPEC+ output cuts, restarting fears of inflation that could put an end to aggressive interest rate hikes, despite the signs of cooling prices and turbulence in the banking sector. Sam Stovall, chief investment strategist of CFRA Research in New York, comments on this saying “We think that it [rising oil prices] will cause inflation to remain sticky and the Fed definitely wants to ensure that they have a stranglehold on inflation before they take their foot off the brake.” The S&P 500 Energy sub-index was the Best performer of the day on Monday with a gain of 6%. Big-time energy firms such as Chevron Corporation, Exxon Mobil Corp, and Occidental Petroleum Corp rose between 0.2% to 0.9% pre-market hours.
Later in the day, investors will be looking out for data on the US job openings that is likely to show a drop in February. There’s a separate report that is expected to show a 0.5% decline in the U.S. Factory orders in February, following the manufacturing activity surveys that conveyed weak conditions in March. This might indicate that the Fed’s rate hikes have been successful in bringing the inflation down. As per CME Group’s Fedwatch tool, bets of a 25-basis point rate hike in May are currently at 58.4%.
Alongside key economic data, the investors will also be looking at remarks from the Federal Reserve Board Governor Lisa Cook, Fed Boston President Susan Collins and Fed Cleveland President Loretta Mester for hints related to the Fed rate hike trajectory.
On Monday, the S&P 500 and the tech-heavy Nasdaq rallied 7.4%, and 16.5%, respectively, so far in 2023, recovering from the worst annual drop last year since the 2008 financial crisis. This positivity on Wall Street is driven by the expectations of the Fed going easy on the policy tightening.
Tesla Inc. is an American electric vehicle and clean energy company founded in 2003 by Elon Musk and based in Palo Alto, California. It is considered the most valuable carmaker globally; the company designs, manufactures, and sells electric cars and energy storage systems. The company was listed in the US and has seen remarkable success with the help of their CEO Elon Musk making it one of the biggest and most successful electric car companies in the world.
Elon Musk is a South African-born entrepreneur who made his fortune as a co-founder of PayPal and is currently the CEO and Chief Engineer/Designer of SpaceX, CEO of Tesla Motors and Chairman of SolarCity. He is Chairman of the Musk Foundation and was the former CEO of Zip2 and Tesla Motors. Musk is a huge supporter of carbon-free transportation for all, with a goal of reducing environmental damage caused by use of fossil fuels. He has received multiple awards for his contributions to the field of automotive engineering, and is listed by Forbes as the 21st-richest person in the world.