US pre-open: Stocks set for muted start ahead of ADP report

US futures pointed to a muted open on Wall Street as investors eyed the release of the ADP employment report, which is considered a precursor to Friday’s non-farm payrolls.

At 1105 BST, Dow Jones Industrial Average futures were up 0.1%, while S&P 500 and Nasdaq futures were flat.

Meanwhile, oil prices were on the front foot after the American Petroleum Institute said on Tuesday that US crude inventories fell 7.6m barrels in the week ended 30 September, versus expectations for a 2m increase. West Texas Intermediate was up 1.6% at $49.48 a barrel and Brent crude was 1.7% firmer at $51.72.

Paul Webb, chief executive officer at ADS Securities London, said: “We’ve got a busy few days coming up in terms of US economic data – the ADP payroll survey will provide the usual curtain-raiser ahead of Friday’s non-farms, whilst the ISM non-manufacturing composite reading can also expect to attract some attention.

“In terms of US rate hikes, it’s really becoming a case of timing now, as the Federal Reserve try to head off those inflationary pressures before they pose any meaningful threat, but after yesterday’s adjustments - including the marked fall in gold prices back below $1300/oz – the potential for stocks could be on the upside in the event that any of today’s readings come in a little softer than expected. The next round of quarterly earnings also has the potential to provide some fresh direction, but for that we’ll need to wait until next week.”

Investors will be eyeing more comments from Federal Reserve officials, with Minneapolis Fed President Neel Kashkari due to make opening remarks at a conference in Minneapolis and Richmond Fed President Jeffrey Lacker set to speak at West Virginia’s Marshall University.

On Tuesday, Lacker said he would have voted in favour of an interest rate hike at the September policy meeting if he had been able to vote.

"I would have dissented," Lacker told reporters in Charleston, West Virginia, where he gave a speech on the economic outlook.

Last month, the Fed decided to keep rates at between 0.25% and 0.50% as it waits for further evidence of improvement in inflation and the economy. The central bank indicated that it expects one rate increase this year.

In corporate news, Twitter gained in pre-market trade amid expectations it could field takeover bids this week.

Monsanto and Constellation Brands were among the companies slated to report earnings.

On the data front, the ADP employment report is at 1315 BST and trade balance figures are at 1330 BST. ISM non-manufacturing, industrial new orders and durable goods orders are at 1500 BST.