US stock futures steady ahead of key economic reports

US stock index futures maintained a steady stance on Tuesday, as investors braced for the release of key economic data that could influence expectations regarding Federal Reserve interest rate policy.

The focus has shifted back to the Fed's monetary trajectory following a surge of interest in artificial intelligence (AI) last week, which drove the S&P 500 and Dow Jones industrials to record highs, overshadowing concerns about delayed rate cuts.

The week's spotlight will be on the release of January's personal consumption expenditures price index (PCE), the Fed's preferred inflation metric, scheduled for Thursday. Market sentiment is poised to react to any signs of persistent inflation, which could prompt a reassessment of rate cut expectations for the year.

Additional reports on gross domestic product (GDP), jobless claims, and manufacturing activity due this week will provide further insights into the potential timing of rate adjustments.

"Favourable data—meaning resilient but not abnormally strong growth, coupled with softening inflation—would allow the market bulls to surf on the 'goldilocks' wave," commented Ipek Ozkardeskaya, senior analyst at Swissquote Bank, underscoring the delicate balance desired by investors.

Currently, market expectations for rate cuts have moderated, with 63 per cent of traders foreseeing a rate cut by June, down from nearly 98 per cent at the end of January, according to the CME Group's FedWatch tool. Meanwhile, bets for a July rate cut stand at 83.6 per cent.

In addition to economic data, investors will closely monitor comments from key Fed policymakers scheduled to speak this week, including Atlanta Fed President Raphael Bostic, New York Fed chief John Williams, and Fed Board Governor Christopher Waller.

As of 5:20 a.m. eastern time, Dow e-minis were up marginally by 2 points, while S&P 500 e-minis edged up by 4.25 points, and Nasdaq 100 e-minis rose by 34.75 points.

In premarket trading, Tesla outperformed its peers with a 1.5 per cent rise, while Micron Technology climbed 2.6 per cent on the heels of the AI rally. Zoom Video Communications surged 12.0 per cent after reporting better-than-expected quarterly results, while Unity Software faced a downturn, plummeting 14.5 per cent after issuing a revenue forecast below estimates.

(With Reuters inputs)