US STOCKS-Futures slip as mixed data clouds Fed policy outlook

Wall Street futures slipped on Tuesday as investors assessed chances of the Federal Reserve holding interest rate at its meeting next week, with mixed data adding to uncertainty around the policy outlook. The U.S. services sector barely grew in May as new orders slowed, data on Monday showed, pushing a measure of prices paid by businesses for inputs to a three-year low.

Wall Street futures slipped on Tuesday as investors assessed chances of the Federal Reserve holding interest rate at its meeting next week, with mixed data adding to uncertainty around the policy outlook.

The U.S. services sector barely grew in May as new orders slowed, data on Monday showed, pushing a measure of prices paid by businesses for inputs to a three-year low. While that signaled the Fed's monetary tightening was cooling the world's largest economy, it comes close on the heels of strong jobs data last week, clouding the outlook for the Fed's policy path.

Investors are now focused on inflation data due next week ahead of the Fed meet. Consumer prices are likely to have cooled slightly on a month-over-month basis in May but core prices are expected to have remained sticky. Fed officials last week made the case for the central bank to keep rates steady at its June 13-14 meeting and look for more factors to ascertain whether the economy was cooling or higher rates were warranted. The officials have entered a "blackout" period.

Fed fund futures imply traders have priced in a 76% chance that the Fed will hold interest rates in the 5%-5.25% range, according to CMEGroup's Fedwatch tool. However, they see 50% odds of another 25-basis-point rate hike in July. At 5:44 a.m. ET, Dow e-minis were down 48 points, or 0.14%, S&P 500 e-minis were down 3.75 points, or 0.09%, and Nasdaq 100 e-minis were down 4.25 points, or 0.03%.

U.S. stocks have advanced in recent weeks, with a rally in megacap stocks, a stronger-than-expected earnings season and hopes of a pause in interest rate hikes pushing the benchmark S&P 500 and the tech-heavy Nasdaq to fresh 2023 highs on Friday. Apple Inc slipped 0.5% after hitting a record high in the previous session. The iPhone maker on Monday unveiled a costly augmented-reality headset called the Vision Pro, barging into a market dominated by Meta.

Advanced Micro Devices rose 1.8% after Piper Sandler hiked price target on the stock to $150, the second highest on Wall Street, as per Refintiv data. Oil stocks such as Exxon Mobil and Chevron slipped about 1% each as crude prices dropped about 2% each on concerns about the global economic backdrop.

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