US stock index futures fell slightly on Tuesday, as hopes for an early interest rate cut from the Federal Reserve eased, while Walmart's stronger-than-expected sales forecast for 2025 gave a positive boost to the US business earnings season.
Hotter-than-expected US inflation data last week dashed market hopes for an immediate start to the Fed's easing cycle, halting Wall Street's surge this year.
All three major indexes posted weekly declines on Friday after five straight weeks of gains, although the S&P 500 still closed above 5,000.
Also, China's biggest-ever cut to its benchmark interest rate on Tuesday also failed to boost investor confidence in its stock market, indirectly fueling broader risk-on sentiment.
Goldman Sachs raised their year-end target for the S&P 500 to 5,200, reflecting a roughly 4% upside from current levels, citing an improved earnings outlook.
Nearly 79% of traders are assessing the possibility of a rate cut of at least 25 basis points in June, while expectations for a reduction in May are at 37% compared with 85% in mid-January, according to CME Group's (NASDAQ:CME) FedWatch tool.
Investors are awaiting minutes from the Fed's latest policy meeting as well as comments from a number of other central bank officials this weekend.
Meanwhile, investors are also focused on results from chip designer Nvidia that will take center stage after the market closes on Wednesday and test the market's optimism about the potential of artificial intelligence (AI).
Shares of the chip designer and Tesla were down nearly 1% each in pre-market trading, underperforming other mega-cap stocks. Walmart rose 2.4% after the US retail giant forecast fiscal 2025 sales that were largely above Wall Street expectations and raised its annual dividend by 9%.
Smart television maker Vizio jumped 15.2% after Walmart announced it would buy the company for $2.3 billion. Shares of Home Depot fell 2.2% after forecasting 2024 sales below Wall Street's expectations, signaling weak rising demand will continue to weigh on the company this year.
Intel shares added 3.3% following reports on Friday that the Biden administration was in talks to provide more than $10 billion in subsidies to the semiconductor company. GlobalFoundries (NASDAQ:GFS) jumped 8.3% after the US government on Monday awarded $1.5 billion to the chipmaker for contracts to support semiconductor production.-
