US STOCKS-Wall St set for lower open as private payrolls beat estimates

Wall Street was set to open lower on Wednesday, as strong private payrolls data fanned fears of fewer-than-expected interest rate cuts by the Federal Reserve this year. The tech-heavy Nasdaq and the blue-chip Dow closed at two-week lows on Tuesday as Treasury yields rose to multi-month highs after solid manufacturing activity and factory orders data raised doubts over the prospect of three rate cuts the Fed had forecast for 2024.

Wall Street was set to open lower on Wednesday, as strong private payrolls data fanned fears of fewer-than-expected interest rate cuts by the Federal Reserve this year.

The tech-heavy Nasdaq and the blue-chip Dow closed at two-week lows on Tuesday as Treasury yields rose to multi-month highs after solid manufacturing activity and factory orders data raised doubts over the prospect of three rate cuts the Fed had forecast for 2024. Private payrolls rose by 184,000 jobs in March after advancing by an upwardly revised 155,000 in the previous month, the ADP Employment report showed. Economists polled by Reuters had forecast an increase of about 148,000 last month.

"It looks like a solid report. Pretty broad-based gains, some wage growth as well which is going to keep the Fed on guard," said Ross Mayfield, investment strategy analyst at Baird. "The market has come around to the Fed's expectation for three rate cuts this year, but if we continue to get strong labor market data, it's going to push them further towards fewer than three cuts this year."

The benchmark 10-year U.S. Treasury yield edged higher to 4.3972%, trading just below the year's high of 4.405% hit in the prior session. Services sector data later in the day could offer fresh insights on the U.S. economy.

Traders are pricing in a 57% chance the Fed will cut interest rates by 25 basis points in June, according to CMEGroup's FedWatch tool, down from about 64% a week ago. Cleveland Fed Bank President Loretta Mester and San Francisco Fed Bank President Mary Daly said on Tuesday they think it would be "reasonable" to cut interest rates thrice this year, even as stronger recent economic data has sown investor doubts about that outcome.

A slew of U.S. central bank officials including Powell are slated to speak during the day. Powell's speech is due at 1210 ET (1610 GMT). Focus is also on the Labor Department's jobs report on Friday that is expected to show U.S. nonfarm payrolls increased by 200,000 jobs in March, following 275,000 job additions in February.

Meanwhile, Brent crude prices closed in on the $90 per barrel mark, raising concerns about rising inflationary pressures. At 8:38 a.m. ET, Dow e-minis were down 42 points, or 0.11%, S&P 500 e-minis were down 10.5 points, or 0.2%, and Nasdaq 100 e-minis were down 62.5 points, or 0.34%.

Among individual stocks, Intel slipped 5.1% in premarket trading after the chipmaker disclosed $7 billion in operating losses for its foundry business in 2023, steeper than the $5.2 billion reported the year before. Tesla dipped 1.2%, adding to its near 5% drop on Tuesday after the automaker missed first-quarter delivery estimates.

Paramount Global gained 1.9% after a report said the media giant has been discussing entering into talks with David Ellison, founder of Skydance Media, for a potential deal.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)