By Niket Nishant and Sukriti Gupta

Wall Street’s main indexes were set to open lower on Thursday, as fresh economic data and remarks from a Federal Reserve official tempered optimism around further rate cuts.

The moves reflect a broader sense of caution ahead of Friday’s release of the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure, which could shape expectations for the path of interest rates.

With Fed Chair Jerome Powell noting earlier this week that asset prices appeared fairly highly valued, the stakes are higher for both economic data and corporate earnings to justify current market valuations.

Investors are focused on whether the optimism that has propelled indexes to record highs since the tariff-driven selloff on April 2 is backed by solid fundamentals.

At 08:48 a.m. ET, Dow E-minis (YMcv1) were down 133 points, or 0.29%, S&P 500 E-minis ES1! were down 34.3 points, or 0.51%, and Nasdaq 100 E-minis NQ1! were down 173 points, or 0.29%.

“The real question will be: now that the jobless data is less bad than originally anticipated, does that mean the Fed might not cut (rates) in October and December, but possibly just wait until December,” said Sam Stovall, chief investment strategist at CFRA Research.

The Labor Department data showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 218,000 for the week ended September 20. Economists polled by Reuters had forecast 235,000 claims for the latest week.

Chicago Fed President Austan Goolsbee said he was uneasy with cutting rates too quickly, flagging risks about inflation flaring up.

Investors will also monitor commentary from Fed Vice Chair for Supervision Michelle Bowman, who is scheduled to speak in Washington.

A potential government shutdown in Washington, where budget negotiations have so far failed to yield an agreement, only aggravated the worries.

Analysts warn that a prolonged shutdown could disrupt data releases critical for assessing economic trends, injecting fresh volatility into an already uncertain backdrop.

Among the stocks in focus is Intel INTC, which gained 1% in premarket trading, a day after Bloomberg News reported that the chipmaker has approached Apple AAPL about securing an investment.

Brokerage firm Seaport Research Partners upgraded Intel’s stock to “neutral” from “sell”.

Carmax shares KMX slid 15%, after the used-car retailer reported lower second-quarter profit due to waning demand.

U.S.-listed shares of Lithium Americas LAC climbed about 12.6%, after nearly doubling in the previous session, following a Reuters report that President Donald Trump’s administration is seeking an up to 10% stake in the miner.

Oracle ORCL slipped 1.7% after a regulatory filing showed on Wednesday that the company was aiming to raise $18 billion in debt.