US pre-open: Futures slightly lower ahead of open

Wall Street futures were slightly lower ahead of the opening bell on Wednesday as the S&P 500 neared an all-time high.

As of 1300 GMT, Dow Jones futures were down 0.06%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.05% and 0.03% lower, respectively.

The Dow closed 159.36 points higher on Tuesday as traders returned from the Christmas break in a positive mood.

S&P 500 futures neared a record high before the open, sitting within 0.5% of its best close, after the Street kicked off the final trading week of 2023 with gains.

SPI Asset Management's Stephen Innes said: "US equities are at or above an overbought state, which may not have significant implications by itself if economic data doesn't warrant a rebuttal. Especially as the current market juncture coincides with the onset of the 'Santa rally' window,

"Aside from the customary Santa seasonality, any gains witnessed for the remainder of this week may be attributed to the notable increase in the probability of a soft landing, as indicated by the latest round of high-impact macroeconomic data from the United States. In summary, the prevailing sentiment suggests a 'risk-on' environment in US markets, with renewed optimism focused on anticipating swifter and earlier rate cuts."

On the macro front, US mortgage applications dropped 1.5% in the week ended 15 December, according to the Mortgage Bankers Association, halting a six-week run of increases. Applications to refinance a home dropped by 2% month-on-month, but remained 18% higher year-on-year, while applications to purchase a home dropped 1% lower.

Last week's fall comes despite benchmark Treasury yields continuing to decline following dovish signals sent by policymakers at the Federal Reserve.

Still to come, the Richmond Federal Reserve will publish its December manufacturing index at 1500 GMT.

Reporting by Iain Gilbert at Sharecast.com