U.S. Stock Futures Steady Ahead of Pivotal Week for Inflation, Earnings
U.S. stock index futures showed little movement on Monday, with investors gearing up for a significant week that includes the release of key inflation data, Federal Reserve Chair Jerome Powell’s testimony, and the kick-off of the second-quarter earnings season.
Following a slowdown in U.S. job growth reported in Friday’s nonfarm payrolls, expectations for interest rate cuts as early as September have strengthened. According to CME FedWatch data, traders now foresee a 70% probability of a 25 basis point cut at the Fed’s September meeting, up from 60% a week earlier, with expectations for a total 50 bps cut for the year.
Investors are particularly focused on Thursday’s release of June’s consumer price index, which will provide further insights into inflation trends. Economists anticipate a slight increase of 0.1% in U.S. headline inflation from the previous month’s flat reading, while core inflation is expected to rise by 0.2%.
Last Friday, the S&P 500 and Nasdaq closed at record highs, buoyed by strong performances from megacap tech stocks like Meta Platforms and Microsoft, both reaching new peaks. Pre-market trading saw modest gains for Apple and Alphabet, while Nvidia experienced a slight decline.
The upcoming earnings season, beginning with major banks like Citigroup, JPMorgan Chase, and Wells Fargo on July 12, will also be closely monitored. JPMorgan shares dipped 0.4% premarket after broader losses affected the S&P 500 banks index, which fell 1.6% in Friday’s session.
Investors are keen to assess whether the significant rise in a few megacap stocks, such as Nvidia, can justify their premium valuations during this earnings period. Powell’s semi-annual testimony before the Senate Banking Committee on July 9 and House Financial Services Committee on July 10, along with remarks from other Fed officials throughout the week, will provide further direction for market sentiment.
Additionally, market participants await the release of June’s producer price index and the University of Michigan’s consumer survey data scheduled for Friday.
As of 5:57 a.m. ET, Dow e-minis edged up 9 points, or 0.02%, S&P 500 e-minis were down 2.25 points, or 0.04%, and Nasdaq 100 e-minis showed a decline of 6.75 points, or 0.03%.
Paramount Global saw a 3.9% rise following Sunday’s announcement of its merger with Skydance Media, which offered $4.5 billion in cash or stock plus an additional $1.5 billion to strengthen Paramount’s balance sheet.
