By Shashwat Chauhan and Bansari Mayur Kamdar
(Reuters) -U.S. stock index futures remained sluggish on Thursday in thin trading ahead of Easter break, as investors awaited more data to gauge the Federal Reserve’s policy path on the last business day of a strong first quarter.
The three main indexes were set for strong quarterly gains, as an AI-fueled rally and optimism around the Fed’s rate cuts helped lift Wall Street to record highs this month.
The blue-chip Dow was just 0.6% short of crossing the 40,000 level for the first time.
All three indexes ended higher in the previous session, with the Dow jumping more than 1% to post its best daily gain this year, while the clocked an all-time closing high.
Investors awaited the final readings of fourth-quarter GDP, the University of Michigan’s consumer sentiment survey and the weekly jobless claims data.
Heading into the long weekend, focus will also be on the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, which is due on Good Friday, when the U.S. stock market will remain shut.
A surprise rise in inflation could potentially dampen market enthusiasm over early rate cuts.
Overnight, Fed Governor Christopher Waller said recent disappointing inflation data affirms the case for the Fed to hold off on cutting its short-term interest rate target, but he did not rule out trimming rates later in the year.
“His words echo those of Bostic, another hawk, who last week said he sees only one cut this year,” strategists at Societe Generale (OTC:) said in a note.
“This puts the Fed on course for a split vote over what to do with interest rates in June if the next three inflation data points do not reassure, or thinking of the dual mandate, employment trends do not deteriorate.”
Traders see a 64% chance that the Fed will begin its easing cycle in June, as per the CME FedWatch tool.
At 07:00 a.m. ET, were down 5 points, or 0.01%, were down 2.5 points, or 0.05%, and were down 11.75 points, or 0.06%.
Among individual stocks, chipmaker Nvidia (NASDAQ:) dipped 0.5% before the bell, after falling more than 2% each in the last two sessions. The AI winner is still set for more than 80% gains this quarter.
The Philadelphia Semiconductor Index is on track to end its second straight quarter with double-digit gains.
Take-Two (NASDAQ:) Interactive Software shed 1.3% after the video game publisher said it would buy Gearbox Entertainment, best known for the first-person shooter game Borderlands, from Sweden’s Embracer for $460 million.
Cryptocurrency and blockchain-related companies advanced as bitcoin recovered after a two-day slide. Exchange operator Coinbase (NASDAQ:) Global, software company MicroStrategy and crypto miner Riot Platforms (NASDAQ:) rose between 2.2% and 2.6%.
