NEW YORK, Jan 3 — US stock index futures slipped yesterday, setting a somber tone for the first trading day of 2024, as Apple dipped on a broker downgrade and investors pondered if last year’s big market gains could be sustained.

The three major US stock indexes notched monthly, quarterly and annual gains on Friday as traders priced in higher chances of interest rate cuts from the Federal Reserve this year on the back of cooling inflation.

For 2023, the benchmark S&P 500, the tech-heavy Nasdaq .IXIC and the blue-chip Dow posted double-digit gains. The S&P 500 wrapped up Friday within 1 per cent of its record closing high reached on January 3, 2022.

However, US stock futures came under pressure yesterday, with the yield on 10-year US Treasury notes, a benchmark for global borrowing costs, ticking above 4.0000 per cent to a two-week high earlier in the session, before easing to 3.9594 per cent.

Megacap stocks including Nvidia, Tesla and Alphabet lost between 0.7 per cent and 1.1 per cent in premarket trading. Apple fell 1.8 per cent after Barclays downgraded the iPhone maker’s stock to “underweight”.

At 7.06am ET, Dow e-minis 1YMcv1 were down 196 points, or 0.52 per cent, S&P 500 e-minis were down 33.75 points, or 0.7 per cent, and Nasdaq 100 e-minis were down 173.25 points, or 1.02 per cent.

Following a blockbuster 2023, boosted by optimism around artificial intelligence and stabilizing interest rates, more inflation data and looming presidential elections will put the prospect of further market gains to test.

S&P Global’s final reading of US manufacturing activity for December is due at 9:45 am ET. Other economic data this week includes weekly jobless claims, monthly private and non-farm payrolls data as well as services sector data.

Market participants are also awaiting the Fed’s December policy meeting minutes, scheduled for release today, to ascertain the timing of the widely anticipated rate cuts.

“Should the minutes reveal that rate cuts were a main topic in policymakers’ discussion, and should Friday’s jobs data point to some further softness of the labour market, traders may be tempted to add to their rate cut bets,” said Charalampos Pissouros, senior investment analyst at XM.

Traders see a near 90 per cent chance of a pause in rate hikes in the January meeting, and an about 82 per cent chance of at least a 25-basis point cut for the March meeting, according to the CME Group’s FedWatch tool.

Stocks of companies linked to cryptocurrencies gained premarket.

Coinbase Global and MicroStrategy jumped 4.1 per cent and 7.7 per cent, respectively, as bitcoin stormed above US$45,000 for the first time since April 2022 on optimism around the possible approval of exchange-traded spot bitcoin funds.

Energy majors such as Exxon Mobil and Chevron gained 0.8 per cent and 1 per cent, respectively, tracking a jump in crude prices after a naval clash in the Red Sea raised the chances of Middle East supply disruptions.

Boeing shed 1.3 per cent after Goldman Sachs removed the aerospace company from its “conviction list”. — Reuters