U.S. stock index futures took a breather on Tuesday after a sharp rally in the previous session, while investors scaled back expectations for an early start to interest-rate cuts ahead of key inflation reports due later this week.
Megacap stocks Apple (AAPL.O), Alphabet (GOOGL.O) and Amazon.com (AMZN.O) slipped 0.6% each in premarket trading after steering a more than 2% surge on the tech-heavy Nasdaq (.IXIC) on Monday, its best day since November. The benchmark S&P 500 (.SPX) also drew close to its highest closing level hit two years ago.
Nvidia (NVDA.O) also slipped 0.1% after closing at a record high on unveiling new artificial intelligence components.
Data on consumer and producer inflation expected on Thursday and Friday, respectively, will be crucial for clues on the Federal Reserve's monetary policy trajectory. Some analysts expect greater attention around producer inflation figures after the recent downturn in crude oil prices.
"We believe core inflation data still suggests the need for a somewhat restrictive monetary policy," UBS analysts wrote.
"With the rate of inflation approaching the 2% Fed target, our base case scenario considers a soft landing in which growth slows to just below trend and the Fed cuts rates by 100 basis points, starting in May."
Market participants see a 57% chance the Fed could slash rates by at least 25 basis points in March, as per the CME Group's FedWatch tool, down from nearly 64% on Monday, amid mixed signals from policymakers on the timing of rate cuts.
Atlanta Fed President Raphael Bostic on Monday stressed the need to keep monetary policy tight, while Fed Governor Michelle Bowman retreated from her persistently hawkish view and signaled a willingness to support eventual rate cuts as inflation eases.
On the day, investors will parse Fed Vice Chair for Supervision Michael Barr's remarks for his perspectives on the policy outlook.
Also in focus are quarterly earnings from JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Bank of America (BAC.N) and Citigroup (C.N) on Friday, for insights into the health of corporate America.
Boeing (BA.N) dipped 0.7%, down for the second day as the U.S. National Transportation Safety Board continued its probe into a recent mishap.
Carriers like Delta Air Lines (DAL.N) and American Airlines (AAL.O) slipped 0.8% and 0.6%, respectively.
At 7:04 a.m. ET, Dow e-minis were down 174 points, or 0.46%, S&P 500 e-minis were down 22.75 points, or 0.47%, and Nasdaq 100 e-minis were down 109.5 points, or 0.65%.
Juniper Networks (JNPR.N) surged 22.7% after a source told Reuters Hewlett Packard Enterprise (HPE.N) was in talks to buy the networking product maker in a $13-billion deal. The server maker dropped 9.2%.
Unity Software (U.N) rose 2% as the videogame software provider aims to lay off approximately 25% of its workforce, according to a Reuters report.
On the flip side, Netflix (NFLX.O) dropped 2.2% after brokerage Citigroup downgraded the streaming platform to "neutral" from "buy".
Ride-hailing platforms Lyft (LYFT.O) and Uber Technologies (UBER.N) fell 1.2% and 0.9%, respectively, after the U.S. Department of Labor issued a final rule forcing companies to treat some workers as employees, rather than less expensive independent contractors.
