© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 29, 2023. REUTERS/Brendan McDermid
By Shristi Achar A and Amruta Khandekar
(Reuters) -Futures tracking the Dow Jones rose on Thursday as shares of Salesforce (NYSE:) jumped after the company raised its annual revenue forecast, while investors awaited a key inflation reading due later in the day.
Shares of Salesforce, which also forecast upbeat quarterly sales, rose 5.6% before the bell as the cloud-based software provider benefits from price hikes and a resilient demand.
The closed at a near three-week high on Wednesday after data showing a softer-than-expected growth in private payrolls added to evidence of a cooling U.S. economy, raising hopes the Federal Reserve could pause rate hikes.
The index has fallen 1.6% in August due to declines in the first half of the month on fears of interest rates staying higher for longer.
Investors now await the price consumption expenditure (PCE) index for July, the Fed’s preferred inflation measure, due at 8:30 a.m. ET. The core PCE price index is expected to have climbed 4.2% in the 12 months through July, according to economists polled by Reuters.
“The markets are so data driven right now, aping the stance adopted by central bankers, and it feels like a worse than expected reading could extinguish the recently improved sentiment,” said Russ Mould, investment director at AJ Bell.
“If it comes in higher than anticipated then we could see renewed nervousness ahead of the Fed’s meeting next month.”
Traders’ bets on the Fed leaving interest rates unchanged in its September meeting stood at 88.5%, while odds of a pause in the November meeting rose to nearly 56% from 50% a day earlier, according to the CME FedWatch tool.
Investors also parsed Atlanta Fed President Raphael Bostic’s comments as he made a case against further U.S. interest rate hikes, saying monetary policy was tight enough to bring inflation down to 2% over a “reasonable” period.
Weighing on sentiment, China’s manufacturing activity contracted for a fifth straight month, stoking concerns about demand prospects in the world’s second largest economy.
U.S.-listed shares of Chinese companies including PDD Holdings, JD (NASDAQ:).com, Baidu (NASDAQ:) and Alibaba (NYSE:) fell between 1.1% and 2.7%.
At 7:14 a.m. ET, were up 114 points, or 0.33%, were up 3.75 points, or 0.08%, and were down 13.5 points, or 0.09%.
Among other stocks, Dollar General (NYSE:) slumped 14.2% after the discount retailer cut its annual same-store sales forecast. Peer Dollar Tree (NASDAQ:)’s shares also fell 2.0%.
Victoria’s Secret & Co dropped 5.5% after the company forecast a decline in its third-quarter sales and missed its second-quarter results estimates.
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