Pre-Market | Market Caution Prevails Ahead of Key Inflation Data and Fed Testimony

29 Aug., Market sentiment remains cautious ahead of the release of key PCE inflation data and Fed Chairman Jerome Powell's testimony, leading to a steepening of the Treasury yield curve as investors grapple with inflation concerns and dovish signals from the Federal Reserve. This cautious sentiment is reflected in the pre-market performance of major indices, with DOW FUTURES down 0.30%, NASDAQ FUTURES down 0.51%, and S&P FUTURES down 0.29%. The anticipation of a September rate cut has strengthened, bolstered by soft unemployment data, which has also supported gains in gold prices.

In pre-market trading, Alibaba Group Holding Ltd. saw its shares rise by approximately 3.96%, driven by a surge in demand for strong AI, which has boosted cloud revenue growth. Royal Bank of Canada's shares also rose by 0.79% as the company exceeded third-quarter earnings expectations. Meanwhile, Caterpillar Inc. experienced a drop of 2.38% due to upward revisions in estimates of the impact from increased U.S. tariffs. Banco Santander, S.A. saw its shares decline by 2.28% following a downgrade from Kepler Capital Markets, which changed its rating from strong-buy to hold.

Movano shares surged over 61% in pre-market trading after the company received approval for a Nasdaq listing extension, ensuring its compliance status. Meanwhile, SMX saw a significant rise of over 44% in pre-market trading, driven by a strategic partnership with Singapore's A*STAR to develop a plastic circularity platform. CaliberCos, on the other hand, experienced a sharp decline of over 30% in pre-market trading following a notice of non-compliance with Nasdaq equity listing rules. Offerpad Solutions dropped nearly 20% in pre-market trading.

The U.S. Treasury yield curve steepened as market caution prevailed ahead of key PCE inflation data and Federal Reserve testimonies, driven by investor concerns over inflation and policy shifts. Alibaba reported robust quarterly results, with revenue growing 10% year-over-year, emphasizing investments of 38.6 billion yuan in AI and cloud infrastructure alongside strong AI-related revenue growth at its cloud unit. The company also executed an $815 million share buyback for 56 million shares and highlighted its strategic focus on consumer and AI sectors. Federal Reserve rate cut expectations strengthened, with markets anticipating easing as early as September based on inflation commentary and unemployment data, boosting asset prices.