Investing.com — Wall Street is expected to fall on Tuesday as traders price in a lower chance of a rate cut in the first half of the year following strong economic data. Rubrik is planning an IPO and UBS has announced a new share buyback program.
1. Futures fall. Is the Fed's interest rate cut delayed?
U.S. stock futures fell sharply on Tuesday, continuing weakness in pre-market trading on concerns that the Federal Reserve's interest rate cuts will be delayed until the second half of the year.
By 4:25 ET (9:25 GMT), the contract was down 105 points (0.3%), down 2 points (0.1%) and up 5 points (0.1%).
The major indexes closed sharply lower on Monday, with the composite index down 240 points, or 0.6%, and the composite index down 0.2%. Tech stocks bucked the trend, rising 0.1%.
The weakness followed indicators of the strength of the U.S. manufacturing sector, raising questions about whether the Federal Reserve will cut interest rates in June.
More economic data will be released on Tuesday, including February's and , ahead of Friday's widely watched March report.
2. Expectations for Fed interest rate cuts recede
Strong U.S. data on Monday prompted traders to back off expectations that the Federal Reserve would cut interest rates for the first time this year.
CME's FedWatch tool now projects a 61.3% chance that the Fed will cut interest rates in June, down from about 70.1% a week ago.
This is a tailwind for the US currency, with the currency's benchmark against its main rivals trading just below the four-month high of 105.07 seen on Monday.
This strength is most evident against the Japanese yen, which is trading just below the 152 yen level that last triggered intervention by Japanese authorities in 2022.
The yen's weakness comes despite the Bank of Japan raising interest rates for the first time since 2007 last month, and Finance Minister Shunichi Suzuki reiterated earlier Tuesday that he was not ruling out all options to deal with unregulated currency fluctuations. expressed.
3. Rubrik announces IPO plans
The IPO market has picked up since Rubrik announced plans to list its shares on Monday, with another wave of companies turning to the capital markets after two years of stagnation.
The cybersecurity platform is set to follow on from its recent debut. reddit (New York Stock Exchange:) and Astera Research Institute (NASDAQ:).
After 2021 was a record IPO year, soaring inflation and rising interest rates have dried up technology investment in public and private markets.
The company's sales rose about 5% to $627.9 million in the fiscal year that ended in January, but its net loss widened to $354.2 million from $277.7 million a year earlier.
Rubrik will trade on the New York Stock Exchange under the ticker symbol “RBRK.”
4. UBS's share buyback shows confidence
UBS (SIX:) is emerging from the turmoil surrounding its merger with troubled rival Credit Suisse in a relatively favorable position, although questions remain about the accuracy of Credit Suisse's financial reporting. be.
UBS reported last week that “material errors” in its annual report were not detected by UBS and risked material misstatement of the financial results reported by Credit Suisse.
But Switzerland's leading bank signaled confidence in the future by announcing a share buyback program of up to $2 billion on Tuesday, which it said would begin on Wednesday.
The plan follows a share buyback in 2022 in which UBS bought back 298.5 million shares, or 8.6% of its stock, for $5.2 billion.
Before the deal was announced, UBS had already bought back about 1.2 billion Swiss francs ($1.32 billion) worth of shares.
5. Gross profit driven by strong manufacturing activity data
Oil prices rose on Tuesday, helped by signs of improving demand in China and the United States, the world's biggest oil consumers.
By 4:25 ET, futures were trading 1.3% higher at $84.81 per barrel, while the contract was up 1.2% at $88.48 per barrel.
Manufacturing activity expanded in March for the first time in six months in China and for the first time in a year in the United States, according to data released earlier this week, which should lead to an increase in oil demand by these two economic giants. .
At the same time, Israel's deadly attack on the Iranian embassy in Syria has raised concerns about further supply disruptions from the oil-rich Middle East, and the Israeli-Iranian-backed Hamas war in Gaza has begun. It intensified.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will on Wednesday hold an online meeting of a joint ministerial oversight committee to review the market.
