US pre-open: Profit taking set to continue as data pulls focus

(Sharecast News) - US stock futures were pointing to a weak start on Wall Street on Tuesday as investors continued to treat cautiously in light of recent resilient data ahead of another busy few days for economic indicators.

Last week's revelation about a pick-up in PCE inflation along with stronger-than-expected activity in the US manufacturing sector has "cast doubt on expectations for a June rate cut [from the Federal Reserve]", according to Stephen Innes, managing partner at SPI Asset Management.

"US equity bulls may be forced into profit-taking mode as the second quarter begins, following the best start to the year since 2019," Innes said.

The Dow, S&P 500 and Nasdaq were all showing losses of around 0.3% to 0.4% by 0657 in New York, following a mixed session on Monday. The indices have risen strongly since the start of 2024, rising 4.9%, 10.6% and 11.0% respectively.

Looking ahead to Tuesday's agenda, we'll see US job openings data along with some closely watched speeches from numerous Fed members including New York and San Francisco Fed presidents John Williams and Mary Daly, respectively. Wednesday will see the release of the ADP employment report, followed by the all-important non-farm payrolls data on Friday.

"Doubts surrounding the extent of rate cuts by the Fed, coupled with caution ahead of key economic data releases during the early part of the month, including NFP and CPI, are dampening sentiment," Innes said.

In the corporate space, Tesla will be in focus ahead of its first-quarter report later on, with analysts expecting the electric car maker to report an 8% annual increase in deliveries to 457,000 units.

Tumultuous trading is expected to continue for Trump Media & Technology Group after the Truth Social parent's stock-market debut last week. The stock, which surged more than 30% in its first two days on the market, has now slumped below the $50 mark it debuted at, after the company revealed it lost $58m last year on just $4.1m of revenues.