Wall St set to open higher as soft jobs boost rate cut bets

By Johann M Cherian and Pranav Kashyap

Dec 3 (Reuters) – Wall Street’s main indexes were set to open higher on Wednesday as investors assessed a softer-than-expected jobs report that bolstered the case for an interest rate cut by the Federal Reserve when it meets later this month.

Investors assessed the ADP National Employment Report, which showed U.S. private payrolls unexpectedly declined in November, falling by 32,000 jobs, compared with expectations for a gain of 10,000 jobs in a Reuters poll of economists.

With official employment reports for October and November landing only after next week’s decision, the market is leaning more-than-usual on private-sector data.

Traders expectations for a 25-basis-point cut at next week’s Fed meeting rose to 88.8% after the data, from 87%, CME’s FedWatch Tool showed.

The private payrolls report has recently been lining up quite closely with the broader U.S. jobs data. With a Fed rate cut looking more likely and risk assets finding some balance, both factors should give markets a boost today, said Art Hogan, chief market strategist at B. Riley Wealth.

Markets are looking to the Fed’s industrial production report for September and an ISM survey on services, with particular focus on its prices-paid component due later on Wednesday, ahead of Friday’s personal consumption expenditures data, the Fed’s preferred inflation gauge.

At 08:32 a.m. ET, Dow E-minis were up 93 points, or 0.20%, S&P 500 E-minis were up 17.5 points, or 0.26% and Nasdaq 100 E-minis were up 50.25 points, or 0.20%.

A report that the Trump administration had abruptly canceled interviews with finalists for the Fed chair role firmed up the view that Kevin Hassett – seen as a U.S. interest rate cutter – will replace Jerome Powell next May.

Traders are weighing that prospect against a patchy economic backdrop, with manufacturing data and holiday sales sending mixed signals even as a chorus of influential policymakers has turned more dovish on interest rate cuts in recent days.

In premarket trading, Marvell Technology jumped 10.7% after the chipmaker said it will buy semiconductor startup Celestial AI in a deal worth $3.25 billion and gave a bullish forecast for its next fiscal year.

Microchip Technology rose 3.2% after the chipmaker raised its expectations for third-quarter net sales and earnings per share, driven by strong bookings.

American Eagle Outfitters raised its annual comparable sales forecast, betting on marketing-driven demand for its apparel and accessories during the holiday season, sending its shares up 13%.

Macy’s lost 6.7% after the department store operator took a more cautious tone on holiday spending.

Crypto stocks such as Strategy and Bit Digital gained 2.6% and 3.6%, respectively, as bitcoin recovered 1.6% and touched a two-week high.

CrowdStrike fell 1% after reporting quarterly results and forecasts.

(Reporting by Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid)