Futures dip as caution prevails in data-packed week

By Shashwat Chauhan and Purvi Agarwal

(Reuters) -U.S. stock index futures started December on a sour note after recording robust gains last month, with focus on a slew of economic data this week, including multiple labor market reports, to gauge the Federal Reserve's interest rate path.

This week's centerpiece would be the November nonfarm payrolls report due on Friday, a key metric in also gauging the state of the labor market.

"Strong data will certainly revive the rate-cut-or-not discussions, while soft numbers will boost appetite for another 25bp cut from the Fed," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Traders currently see a more than 65% chance of the Fed opting for a 25-basis-point rate cut when it meets later this month, compared to a near 83% chance seen a month prior, as per CME's FedWatch Tool, on the back of data pointing to a resilient economy.

An October jobs opening reading is slated to be released on Tuesday, while November private payrolls data is due on Wednesday.

The benchmark S&P 500 and the blue-chip Dow clocked all-time closing highs on Friday, and recorded their best month in a year, capping off a stellar November for U.S. equities.

Investors relished in U.S. stocks last month after Republican candidate Donald Trump recaptured the White House along with his party sweeping both houses of Congress.

Analysts expect Trump's policies on tax cuts, tariffs and deregulation could spur greater corporate performance. However, concerns that his policies could bump up inflation have also led to markets dialing back hopes of the Fed ramping up its rate easing cycle.

The week is also packed with data that could indicate how the economy is faring, including multiple surveys of economic activity for the last month.

November manufacturing activity surveys from S&P Global and the Institute for Supply Management (ISM) are due later in the day.

Numerous Fed speakers will also make public appearances this week including Fed Chair Jerome Powell, with investors hunting for any clues on the central bank's policy path.

Comments from Fed Governor Christopher Waller and New York Fed President John Williams would be on the radar later in the day.

At 6:53 a.m. ET, Dow E-minis were down 31 points, or 0.07%, S&P 500 E-minis were down 8.25 points, or 0.14% and Nasdaq 100 E-minis were down 29.5 points, or 0.14%.

On the day, most megacap and growth stocks were slightly lower, with Nvidia (NASDAQ:NVDA )'s 1% fall leading losses. Tesla (NASDAQ:TSLA ), on the other hand, outperformed with a 1.5% advance.

Among other early premarket movers, Gap rose 4.8% after J.P. Morgan upgraded the apparel retailer's rating to "overweight" from "neutral".



Chip equipment companies such as Applied Materials (NASDAQ:AMAT ) and KLA Corp were marginally lower after a Reuters report said that the U.S. will be curbing semiconductor exports to 140 Chinese companies.

Software (ETR:SOWGn ) firm Cloudflare (NYSE:NET ) gained 3.9% after Morgan Stanley (NYSE:MS ) raised its rating to "overweight" from "equal-weight" on the stock.

Source: Investing.com