Futures steady with inflation, earnings data in focus

Futures steady with inflation, earnings data in focus
Futures steady with inflation, earnings data in focus

U.S. stock index futures were little changed Monday as investors braced for a busy week that will see the release of a key inflation report, testimony from Federal Reserve Chairman Jerome Powell and the start of second-quarter earnings season.

Expectations of an interest rate cut as early as September were reinforced after the release of nonfarm payrolls figures on Friday.

the evolution of employment in the United States

showed that U.S. job growth slowed in June, the latest data to indicate weakness in the labor market.

However, investors are focusing on each potential index to get a clearer picture of the Fed’s monetary policy for the year.

Traders now see a 70% chance the Fed will cut rates by 25 basis points at its September meeting, up from 60% a week ago, while expecting an overall cut of about 50 basis points for the year, according to CME FedWatch data.

On the data front, the release of the June consumer price index on Thursday will be closely watched for further indications of easing price pressures.

On a monthly basis, US headline inflation is expected to edge up 0.1% from a flat reading in the previous month, while core inflation is expected to rise 0.2%.

The S&P 500 and Nasdaq continued to rally on Friday, closing at all-time highs, while big-cap tech stocks such as Meta Platforms and Microsoft hit record highs.

Windows software maker Apple and Alphabet were up 0.2% to 0.4% in premarket trading, while Nvidia was down 0.5%.

Major banks including Citigroup, JPMorgan Chase and Wells Fargo will kick off second-quarter earnings season on July 12.

JPMorgan shares slipped 0.4% in premarket trading, after the S&P 500 index of banks ended Friday’s session down 1.6%.

Investors are focusing on earnings season to see if the surge in stocks of a handful of large caps, such as Nvidia, can justify their lofty valuations.

Markets will also be closely watching Mr. Powell’s semiannual testimony before the Senate Banking Committee and the House Financial Services Committee on July 9 and 10, respectively, as well as comments from several other Fed officials throughout the week.

Producer price index data for June and University of Michigan consumer survey data are also scheduled to be released Friday.

At 5:57 a.m. ET, the Dow e-minis were up 9 points, or 0.02%, the S&P 500 e-minis were down 2.25 points, or 0.04%, and the Nasdaq 100 e-minis were down 6.75 points, or 0.03%.

Paramount Global rose 3.9% after announcing Sunday that the company would merge with Skydance Media, which offered $4.5 billion in cash or stock and an additional $1.5 billion to shore up Paramount’s balance sheet.

Airplane maker Boeing gained 0.6% after the company agreed to plead guilty to conspiracy to defraud and pay a $243.6 million fine to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes.

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