Futures muted, Fed’s Barkin on rates, Disney to report

Investing.com — U.S. stock futures were largely muted on Tuesday after hopes for Federal Reserve interest rate cuts later this year spurred on a jump in equities in the prior session. Richmond Fed President Thomas Barkin says that borrowing costs are currently “restrictive” enough to corral elevated inflation. Walt Disney (NYSE:) gears up to unveil its first quarterly results since it won a fierce proxy battle with activist investors.

1. Futures muted

U.S. stock futures were mixed on Tuesday, as investors poured through fresh inflation commentary from Federal Reserve policymakers and looked ahead to a new batch of quarterly earnings.

By 03:32 ET (07:32 GMT), the contract had gained 46 points or 0.1%, were mostly unchanged, and had edged down by 10 points or 0.1%.

The main indices on Wall Street rose in the prior session, buoyed by hopes that softer-than-anticipated monthly U.S. labor market report may persuade the Fed to slash interest rates down from more than two-decade highs as soon as September. Prior to the data, markets were expected the central bank to roll out a cut in November.

Chipmakers were among the best performing stocks on Monday, with Arm Holdings (NASDAQ:) in particular rising 5.2% ahead of its fiscal fourth-quarter results after the closing bell on May 8. Paramount Global shares also advanced following the expiration of exclusive negotiations with Skydance Media over a potential deal, which will give the entertainment giant the opportunity to explore competing bids.

Shares in Spirit Airlines (NYSE:), meanwhile, slumped following a weak current-quarter revenue outlook from the low-price carrier.

2. Interest rates “restrictive” enough to cool inflation – Fed’s Barkin

Interest rates in the U.S. currently stand at such “restrictive” heights that they can help tamp down demand and cool sticky inflationary pressures, according to Richmond Fed President Thomas Barkin.

Speaking in South Carolina, Barkin said he is “optimistic” that the current level rates — a range of 5.25% to 5.50% — should be enough to bring the pace of price growth back down to the Fed’s target.

Barkin also said he does not believe the economy is on track to overheat, a concern that has factored into the central bank’s decision not to ratchet down rates earlier this year as initially expected. Should the economy slow significantly, he added, the Fed has the “firepower” at…