Nasdaq futures hover near record highs ahead of retail sales data

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 8, 2024. REUTERS/Brendan McDermid/File Photo

By Lisa Pauline Mattackal and Ankika Biswas

(Reuters) -Nasdaq futures hovered around record highs on Tuesday, boosted by chip stocks, while those tracking the S&P 500 and the Dow were subdued ahead of retail sales data and commentary from a slew of Federal Reserve officials.

Technology stocks lifted the benchmark S&P 500 to its fifth record high close in six sessions on Monday, and the Nasdaq to its sixth consecutive record close.

Megacaps Apple, Microsoft and Nvidia edged higher between 0.4% and 0.8% in premarket trading on Tuesday.

Among chip stocks, Broadcom climbed 3% after hitting a record high on Monday, while Qualcomm, U.S.-listed shares of Taiwan Semiconductor Manufacturing Co and Micron were also up between 1.6% and 3%.

The Philadelphia SE Semiconductor index hit a record high in the previous session.

Focus now moves to fresh economic data in the United States, where May retail sales will be closely watched, as well as industrial production and business inventory data.

Comments from U.S. Federal Reserve officials will also be scrutinized for clues on how the central bank's members view the current economic situation and path ahead for monetary policy, after recent projections showed the Fed now sees just one interest rate cut this year instead of the three previously forecast.

Markets have pounced on a string of recent economic data indicating some weakness among consumers and in the labor market, and interest rate futures still reflect expectations of more than one rate cut this year, according to LSEG data.

"The depth and pace of the cutting cycle is still to be determined, but we see two cuts this calendar year," John Velis, Americas macro strategist at BNY Mellon, said.

Six Fed speakers are scheduled for Tuesday, including voting committee members Thomas Barkin and Adriana Kugler, as well as Susan Collins, Austan Goolsbee, Lorie Logan, and Alberto Musalem. [FED/DIARY]

Hopes for multiple interest rate cuts this year, enthusiasm for artificial intelligence linked companies and strong earnings from other tech firms have helped support equities, although rallies over the past few months have largely been on the back of a handful of heavily weighted stocks.

Citigroup raised the year-end target for the S&P 500 to 5,600 points from 5,100, representing a 2.3% upside from the index's previous close.

Futures tracking the Russell 2000 slipped on Tuesday, with the small-cap Russell index already having lost more than 2% for the month.

At 7:13 a.m. ET, Dow e-minis were down 37 points, or 0.1%, S&P 500 e-minis were down 1.5 points, or 0.03%, and Nasdaq 100 e-minis were up 21.75 points, or 0.11%.

Homebuilder Lennar fell 3.1% after forecasting lower-than-expected third-quarter home deliveries.

NextEra Energy dropped 5.3%, extending losses from the previous session after the utility firm announced plans to sell $2 billion of equity units.

Edtech company Chegg jumped 18.8% after announcing job cuts as part of a restructuring plan.

Merck rose 1.4% after the U.S. Food and Drug Administration approved its next-generation vaccine to protect adults against the pneumococcal disease.

Markets will be closed on Wednesday for the Juneteenth holiday.

(Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta)