Dow Jones, S&P 500, Nasdaq look set to spring into March

6.30am: February ISM data in the spotlight 

Wall Street is expected to start the new month on the front foot, with a set of upbeat Chinese PMI surveys boosting Asian markets and investors now looking to US manufacturing data for an indication of how the economy fared in February. 

Futures for the Dow Jones Industrial Average (DJIA) rose 0.3% in Wednesday pre-market trading, while those for the broader S&P 500 index gained 0.4%, and contracts for the Nasdaq-100 added 0.5%.

All three major US indices closed out a volatile month in the red on Tuesday. The DJIA ended at 32,657 for a loss of 0.7%, the S&P 500 was down 0.3% at 3,970 and the Nasdaq Composite slipped 0.1% to 11,456. 

“January economic data generally surprised on the upside leading to a rapid repricing in terminal rate expectation for US rates,” commented TickMill Group market analyst Patrick Munnelly. “The debate amongst market watchers is the extent to which this bump in activity data was due to milder than usual weather and so February releases are expected to give a cleaner read on the underlying nature of activity in the US. 

“Today’s ISM manufacturing metrics and its services counterpart on Friday will be among the first of these February readings and so they are likely to be parsed particularly closely by investors, with consensus coalescing around a continued sub 50 contractionary prints,” Munnelly added.

The ISM manufacturing index, also known as the purchasing managers’ index (PMI), is expected to improve to 48 from 47.4 in January. The market will also focus on the Prices Paid and Employment sub-components of the report for an indication of how manufacturers view inflation going forward and whether they are hiring.

On the corporate front, Salesforce, Lowe’s, Dollar Tree and Budweiser report today as the fourth-quarter 2022 reporting season draws to a close.