Rate-cut jitters pressure Wall Street; key numbers on tap
Updated at 7:08 a.m. ET / 1108 GMT
US GDP, jobless claims numbers due at 8:30 am ET
Dollar General beats Q1 sales estimates, shares rise
Tesla up after report on push to roll out advanced FSD in China
Futures down: Dow 0.85%, S&P 0.39%, Nasdaq 0.30%
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By Johann M Cherian and Lisa Pauline Mattackal
May 30 (Reuters) - Wall Street futures softened on Thursday, as uncertaintyaround how long the Federal Reserve could keep interest rates elevated weighed on investor sentiment ahead of crucialdata that could help decode thestate of the U.S. economy.
Megacaps such as Alphabet GOOGL.O, Microsoft MSFT.O and Nvidia NVDA.O slipped between 0.4% and 0.8% in trading before the bell, extending losses from Wednesday's session asthe yield on Treasury notes hovered above 4.5% for the second day across the board - the highest since the first week of May. US/
Uncertainty over monetary policy, combined with heavy new Treasury issuance, has pushed bond yields higher and pressured stocks. Risingbond yields typically reflect expectations for higher interest rates, which in turn means costlier financing and smaller profit margins for companies.
Investors await the second estimatefor first-quarter gross domestic product, expected at 8:30 a.m. ET. According to a Reuters poll, the world's largest economy expanded by 1.3%, slightly less than the previously thought 1.6%.
Also on tap is the joblessclaims data, expected to show that the number of Americans filing for State unemployment benefits stood at 218,000, from 215,000 recorded the previous week.
The benchmark S&P 500 index .SPX is on track for its biggest weekly drop in six, while the blue-chip Dow .DJI closed at a four-week low on Wednesday.
Markets now expect the Fed's first 25-basis-point rate cut only in November or December, according to the CME Group's FedWatch Tool.
"The Fed cannot yet be satisfied with this level of inflation, given the robust economy, there is also no rush to cut interest rates," Berenberg analysts said in a note.
"We are therefore sticking to our assessment that the Fed will not start the rate-cutting cycle until December."
April's personal consumption expenditure report - the Fed's preferred inflation gauge, due on Friday - could also swaybets on the timing of the central bank's first cut.
Hawkish comments from policymakers have also dampened risk sentiment, and traders will assess remarks from New York Fed President John Williams and Dallas Fed President Lorie Logan later in the day.
At7:08 a.m. ET, Dow e-minis 1YMcv1were down 329 points, or 0.85%, S&P 500 e-minis EScv1were down 20.5 points, or 0.39%, and Nasdaq 100 e-minis NQcv1were down 56 points, or 0.30%.
Dow component Salesforce CRM.N forecast second-quarter profit and revenue below Street estimates due to weak client spending on its cloud and enterprise business products, sending its shares down 15.5%.
Meanwhile, HP HPQ.N gained4.9% after beating Wall Street estimates for second-quarter revenue on Wednesday.
Tesla's TSLA.O shares gained0.9% after Reuters reported the company was preparing to register its'Full Self-Driving' software in China.
American Eagle Outfitters AEO.N dropped 7.4% after the retailer posted downbeat quarterly revenue as sticky inflation hurt demand for its apparel and accessories, often sold at full price.
Dollar General DG.N added 6.3% after the discount retailer posted upbeat first-quarter sales, but department-store chain Kohl's KSS.N slumped 22% after cutting its annual sales and profit forecasts.
Moderna MRNA.O added 2.7% after a report said the U.S. government is nearing an agreement to fund a late-stage trial of the drugmaker's pandemic bird flu vaccine.
After theU.S. switched tofaster trade settlements for securities, market participants reportedsome processing bumps, although the move hasbeen smooth overall.
Reporting by Johann M Cherian and Lisa Mattackal in Bengaluru; Editing by Pooja Desai
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