Dow set for lower open as Salesforce slide tempers debt deal cheer
Reuters
Published Jun 01, 2023 06:04
Updated Jun 01, 2023 09:23
By Shreyashi Sanyal and Shristi Achar A
(Reuters) - The Dow Jones Industrial Average was set to open lower on Thursday after dismal earnings from Salesforce tempered optimism sparked by passage of a bill by lawmakers to suspend the nation's debt ceiling.
The bill to suspend the $31.4 trillion debt ceiling on Wednesday passed with majority support from both Democrats and Republicans and will now head to the Senate, which must enact the measure before a Monday deadline, when the government is expected to run out of money to pay its bills.
Shares of Dow Jones Industrial Average component Salesforce Inc fell 6.8% in premarket trading after the company posted its slowest pace of revenue growth in 13 years.
Even after the passage of the bill, trading remained in a narrow range as investors focused on economic indicators, which will set the tone for the U.S. Federal Reserve and provide more details on the impact of its aggressive interest rate-hiking cycle on the economy.
The ADP (NASDAQ:ADP) National Employment Report showed private payrolls increased 278,000 last month against expectations of 170,000 additions.
The ADP report comes before the Labor Department's closely watched May jobs data, due on Friday, which could decide whether a rate hike occurs.
Separately, data showed the Labor Department's initial claims for state unemployment benefits were at 232,000 lower than expectations of 235,000 for the week ended May 27.
The odds favoring a pause at the Fed's June 13-14 policy meeting remained at around 70%. Comments by the central bank's officials, who were leaning toward a momentary pause in hikes, had helped drive down bets for a hike on Wednesday. [FEDWATCH]
Comments from Fed Governor and vice chair nominee Philip Jefferson and Philadelphia Fed President Patrick Harker pointed to their inclination toward a rate hike "skip".
"The passage of the debt bill by Congress, certainly is positive as it moves on to the Senate but it also gives the Fed less opportunity to perhaps conclude with the restrictive monetary policy," said Peter Cardillo, chief market economist at Spartan Capital Securities.
"So, a pause probably is not likely. Can they skip? That's a possibility, but with the jobs market being so strong and inflation elevated, it does pose a big question mark for the Fed."
At 8:44 a.m. ET, Dow e-minis were down 80 points, or 0.24%, S&P 500 e-minis were up 1 points, or 0.02%, and Nasdaq 100 e-minis were down 6.5 points, or 0.05%.
Nordstrom Inc (NYSE:JWN) gained 5.0% after the upmarket department store chain posted a surprise first-quarter profit, helped by better inventory control and demand from wealthy shoppers.
Get The App
However, Macy's Inc (NYSE:M) shed 4.7% and Dollar General Corp (NYSE:DG) slid 9.4% as both retail companies cut their full-year sales forecasts amid high inflation.
C3.ai Inc slumped 19.7% after the artificial intelligence company forecast annual revenue outlook below street estimates.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.