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Pepsico ( PEP ) down after annual sales growth forecast cut
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U.S.-listed shares of Chinese cos fall
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Futures up: Dow 0.14%, S&P 500 0.4%, Nasdaq 0.44%
(Updated at 6:55 a.m. ET)
By Lisa Pauline Mattackal and Pranav Kashyap
Oct 8 (Reuters) - U.S. stock index futures bounced back
on Tuesday from a selloff in the previous session, as investors
turned their focus on key inflation data and third-quarter
earnings later this week for fresh insights into the Federal
Reserve's interest rate path.
All three major indexes closed down around 1% on Monday, as
a jump in Treasury yields, concerns about the impact of rising
conflict in the Middle East and a repricing of U.S. rate
expectation pressured equities.
U.S. S&P 500 E-minis were up 22.75 points, or 0.4%,
Nasdaq 100 E-minis were up 88 points, or 0.44%, Dow
E-minis were up 61 points, or 0.14%.
U.S. Treasury yields retreated slightly from Monday's highs,
though the yield on the benchmark 10-year note
remained above 4% as strong economic data last week prompted
investors to trim bets on the scope of the Federal Reserve
interest rate cuts over the rest of this year.
Traders have priced in a nearly 89% chance of a 25 basis
point interest rate cut from the Fed at its November meeting.
Bets on no rate change at the meeting also crept up slightly,
according to CME FedWatch.
"We did see strong sell off yesterday so it's not unnatural
to see a slight bounce, particularly as there's a vacuum of
fresh data today," Fiona Cincotta, senior market analyst at City
Index said.
"We're in a lull ahead of the busy end of the week. If we do
get a hotter-than-expected inflation read, that might unnerve
the markets quite quickly".
The CBOE Volatility index, Wall Street's "fear
gauge," retreated from Monday's highs but was still trading
around one-month high at 22.04
Meanwhile, PepsiCo ( PEP ) lost about 1% after the packaged
food giant posted a surprise drop in third-quarter revenue and
cut its forecast for annual sales growth.
The S&P 500 is expected to report a 3.2% year-over-year
earnings per share (EPS) rise in the third quarter, "with gains
for six of its 11 sectors," said Sam Stovall, chief investment
strategist at CFRA Research.
Fed Governor Adriana Kugler said earlier on Tuesday she
supported further interest rate cuts if inflation continues to
ease, as she expects.
Some Fed officials, including John Williams and Alberto
Musalem, had said on Monday that it would be appropriate to
reduce rates over time.
A number of other Fed officials are expected to speak later
in the day, including Raphael Bostic, Susan Collins and Philip
Jefferson.
International trade balance data for August is also due
later on Tuesday.
Investors were also watching out for the impacts of category
4 Hurricane Milton on the markets.
Among single stocks, shares of Honeywell International ( HON )
rose 2.3% after a report that the company is planning to
spin off its advanced materials business.
U.S.-listed shares of Chinese companies slid, tracking
losses in domestic stocks, as optimism over China's stimulus
measures waned due to the absence of more specific details.
Shares of Alibaba Group, JD.com and PDD
Holdings ( PDD ) slumped between 7.4% and 10.2%.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Shinjini
Ganguli)