By Sruthi Shankar and Shashwat Chauhan

(Reuters) -U.S. stock index futures were marginally lower on Wednesday as jittery investors awaited more data and comments from Federal Reserve Chair Jerome Powell after strong readings on the U.S. economy tempered bets on interest rate cuts this year.

The tech-heavy Nasdaq and the blue-chip Dow closed at two-week lows on Tuesday as Treasury yields rose to multi-month highs on stronger-than-expected manufacturing activity and factory orders data that raised doubts over the prospect of three rate cuts the Fed had forecast for 2024.

“With American factories churning out more goods, it’s another piece of the picture pointing to a highly resilient US economy in the face of high borrowing costs,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“It has led to fresh risk-off sentiment spreading, as worries brew about inflation staying doggedly above target and the Fed being potentially forced to hold off from cutting rates by as much as previously forecast this year.”

The benchmark edged higher on Wednesday to 4.3632%. It had hit a 2024 peak of 4.405% in the prior session. [US/]

March private payrolls and services sector data later in the day could offer fresh insights on the U.S. economy.

Traders are pricing in a 62% chance the Fed will cut interest rates by 25 basis points in June, according to CMEGroup’s FedWatch tool, slightly down from about 64% a week ago.

Market participants have also pared back their expectations on the number of rate cuts to about two this year from three a few weeks ago, according to LSEG’s rate probability app.

Cleveland Fed Bank President Loretta Mester and San Francisco Fed Bank President Mary Daly said on Tuesday they think it would be “reasonable” to cut interest rates thrice this year, even as stronger recent economic data has sown investor doubts about that outcome.

A slew of U.S. central bank officials including Powell are slated to speak during the day. Powell’s speech is due at 1210 ET (1610 GMT).

Focus is now on the Labor Department’s jobs report on Friday that is expected to show U.S. nonfarm payrolls increased by 200,000 jobs in March, following 275,000 job additions in February.

At 7:10 a.m. ET, were down 24 points, or 0.06%, were down 9.5 points, or 0.18%, and were down 53.25 points, or 0.29%.

Among individual stocks, Intel (NASDAQ:) slipped 4.6% in premarket trading after the chipmaker disclosed $7 billion in operating losses for its foundry business in 2023, steeper than the $5.2 billion reported the year before.

© Reuters. FILE PHOTO: The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo

Tesla (NASDAQ:) dipped 1.0%, adding to its near 5% drop on Tuesday after the automaker missed first-quarter delivery estimates.

Paramount Global gained 3.1% after a report said the media giant has been discussing entering into talks with David Ellison, the founder of the Skydance media company, for a potential deal.





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