US stock futures edge higher as cooling labor data boosts rate cut hopes

Investing.com-- U.S. stock index futures rose in evening deals on Tuesday, as a swathe of weak U.S. economic readings ramped up hopes that the Federal Reserve will have to eventually cut interest rates to support growth. 

This notion brought down Treasury yields and pushed investors into more risk-driven assets, albeit at a staggered pace. Fears of a weakening U.S. economy also limited broader risk appetite.

S&P 500 Futures rose 0.1% to 5,309.50 points, while Nasdaq 100 Futures rose 0.1% to 18,725.75 points by 19:29 ET (23:29 GMT). Dow Jones Futures rose 0.1% to 38,840.0 points. 

Wall Street rises as soft job openings spark rate cut hopes 

Wall Street indexes rose marginally on Tuesday after data showed job openings in the world’s largest economy fell to a three-year low in April. 

The reading followed weak purchasing managers index data from Monday and a downgraded gross domestic product print from last week.

The weak labor data also comes just days before key nonfarm payrolls data, which is a key gauge of labor market strength. Beyond inflation, which has so far remained sticky, strength in the labor market is also a major consideration for the Fed in cutting interest rates. 

Traders were seen pricing in a 55% chance of a 25 basis point cut in September, up from 52.6% seen a day ago. They also trimmed expectations that the Fed will hold, the CME Fedwatch tool showed. 

Traders were also seen slightly increasing bets on a potential rate cut in July, although the broader consensus remained on a hold. The Fed is set to meet next week and is also set to keep rates on hold. 

Expectations of eventual interest rate cuts offered some strength to Wall Street, although the prospect of a cooling U.S. economy kept gains limited. 

The S&P 500 rose 0.2% to 5,291.34 points on Tuesday, while the NASDAQ Composite rose 0.2% to 16,853.74 points. The economically sensitive Dow Jones Industrial Average was an outperformer, rising nearly 0.4 to 16,853.74 points.

HPE, CrowdStrike surge on strong earnings

Among major aftermarket movers, software consultancy Hewlett Packard Enterprise Co (NYSE:HPE) surged nearly 18% after it clocked strong quarterly earnings and presented an optimistic outlook on the back of artificial intelligence demand. 

Cybersecurity firm CrowdStrike Holdings Inc (NASDAQ:CRWD) rose nearly 7% after it raised its annual guidance following stronger-than-expected quarterly earnings.