Futures edge higher as tech and growth stocks gain; focus on jobs data

(Reuters) – U.S. stock index futures edged higher on Tuesday as some technology and growth stocks rebounded from a selloff in the previous session, while investors awaited key economic data that could determine the Federal Reserves monetary tightening path.

Tesla Inc rose 1.6% in premarket trading, bouncing back from 6% declines on Monday after disclosing March-quarter deliveries, while Meta Platforms Inc and Microsoft Corp climbed about 0.6% each.

Oil prices extended gains on Tuesday, with investor attention shifting to demand trends and the impact of higher prices on the global economy. [O/R]

The renewed inflation worries poured cold water on expectations that the Fed may soon end its aggressive policy tightening amid recent signs of cooling prices, with fresh data on Monday pointing to weakening U.S. manufacturing activity.

Market watchers have been trying to gauge how much longer the Fed may need to keep hiking rates to combat inflation and whether the U.S. economy may be headed for a recession. Concerns over a banking crisis sparked a selloff in the financial sector last month.

However, strong gains in energy stocks helped the benchmark S&P 500 close Monday on a higher note, with the energy sector clocking its strongest one-day gain of nearly 5% in six months on prospects of oil prices inching toward $100 a barrel.

Energy firms Chevron Corp, Exxon Mobil Corp and Occidental Petroleum Corp were set to extend gains, rising between 0.5% and 0.9% premarket.

At 5:54 a.m. ET, Dow e-minis were up 46 points, or 0.14%, S&P 500 e-minis were up 13.75 points, or 0.33%, and Nasdaq 100 e-minis were up 77.5 points, or 0.58%.

The S&P 500 and the tech-heavy Nasdaq have gained 7.4% and 16.5% so far in 2023, recovering from their worst annual drop last year since the 2008 financial crisis, on expectations that the Fed may go easy with its policy tightening.

With renewed inflation concerns, traders‘ bets of a 25-basis point rate hike in May stood at 59.1%, with odds of a pause at 40.9%, according to CME Group’s Fedwatch tool.

Investors will keep a close watch on U.S. job openings, a measure of labor demand, due later on Tuesday, that is likely to show a fall in February and factory orders that likely decreased 0.5% in February.

Remarks by Fed Board Governor Lisa Cook, Fed Boston President Susan Collins and Fed Cleveland President Loretta Mester later in the day will also be parsed for any clues on the interest rate trajectory.

Among stocks, Virgin Orbit Holdings Inc tanked 25% after the satellite launch company filed for Chapter 11 bankruptcy on failing to secure long-term funding.

Etsy Inc gained 3.8% after Piper Sandler upgraded the consumer e-commerce platforms stock to “overweight”.

(Reporting by Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta)