US stock futures muted as Wall St nurses dismal start to Q2

U.S. stock index futures moved little in evening deals on Tuesday, steadying after Wall Street logged a dismal start to the second quarter as uncertainty over the Federal Reserve’s plans to cut interest rates and anticipation of key payrolls data weighed on sentiment.

Investors also locked-in profits in several high-flying sectors, particularly technology, after gains in tech powered U.S. stock indexes to a series of record highs in the first quarter.

S&P 500 Futures fell 0.02% to 5,259.50 points, while Nasdaq 100 Futures fell 0.01% to 18,328.75 points by 19:11 ET (23:11 GMT). Dow Jones Futures fell 0.04% to 39,491.0 points.

Wall St slides from March highs amid rate cut uncertainty
Futures steadied after Wall Street indexes clocked two sessions of steep losses, as a series of hawkish comments from top Fed officials saw markets price out some expectations of interest rate cuts by the central bank.

While the Fed had struck a somewhat dovish tone during its March meeting, a slew of officials speaking after the meeting warned that sticky inflation and strength in the labor market will keep the bank from cutting interest rates early this year.

PCE price index data for February remained sticky, while nonfarm payrolls data for March, due this Friday, is expected to show sustained strength in the labor market. This saw traders slash their expectations for a 25 basis point rate cut in June, according to the CME Fedwatch tool.

Fears of higher-for-longer interest rates saw Wall Street indexes tumble from near record highs in the past two sessions.

The S&P 500 fell 0.7% to 5,205.81 points on Tuesday, while the NASDAQ Composite fell nearly 1% to 16,240.24 points. The Dow Jones Industrial Average was the worst performer among its peers, down 1% at 39,170.24 points.

Tech, healthcare losses weigh
Losses in tech stocks were by far the biggest weight on Wall Street, as Treasury yields also increased in the face of higher for longer interest rates.

Artificial intelligence darling NVIDIA Corporation (NASDAQ:NVDA) fell 0.3% in aftermarket trade after sliding nearly 10% from record highs hit in March.

Intel Corporation (NASDAQ:INTC) slid 3.8% after it disclosed $7 billion in operating losses for its foundry business through 2023, as it lost out more business to Asian rivals including TSMC (NYSE:TSM) and Samsung Electronics Co Ltd (KS:005930).

Tesla Inc (NASDAQ:TSLA) fell 0.4%, extending losses after a 4.9% slide on Tuesday after the electric vehicle maker clocked a quarterly decline in deliveries for the first time in nearly four years.

Among healthcare stocks, insurers Humana Inc (NYSE:HUM), UnitedHealth Group Incorporated (NYSE:UNH) and CVS Health Corp (NYSE:CVS) steadied in aftermarket trade after clocking steep losses on Tuesday. The losses came after the U.S. government declined to increase payment rates for private Medicare plans.