Stock futures edged lower Sunday night as investors await key inflation data for further clues on the longevity of this year’s market rally. Earnings from some major financial giants and consumer companies are also on the docket.
S&P futures were down 0.1%, while futures tied to the Dow Jones Industrial Average lost 31 points, or nearly 0.1%. Nasdaq 100 futures hovered below flat.
The S&P 500 has rallied about 16.7% this year, and the benchmark index just had its fourth positive week in the last five amid ongoing optimism that an improving inflation backdrop — and any pockets of weakness in the economy later this year — could lead to a Federal Reserve interest rate cut.
The June consumer price index, which will be released Thursday, could bolster those hopes if the headline number shows a slight improvement, as currently expected. Producer price index data will be released Friday.
Last week, labor data reflected a slightly cooling labor market, spurring expectations of a rate cut. But although the U.S. economy added more jobs in June than anticipated, there was also an unexpected rise in the unemployment rate, to 4.1% from 4%. Traders are currently expecting two interest rate cuts in 2024, with the first in September, according to the CME FedWatch Tool.
“This [June jobs report] keeps the upcoming inflation data in the driver’s seat for determining the timing of the first cut…signs of continued moderation of economic growth and the labor market will likely be a positive for equities and high yield bonds in, at least, the short run,” Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors, said.
A slew of major banks, including Citigroup and JPMorgan Chase, will kick off second-quarter earnings season this week. PepsiCo and Delta Air Lines are also set to post results.
Stocks are coming off of a strong week, as the S&P 500 and Nasdaq Composite reached all-time highs on Friday and ended at record closing levels, with the broad-market index notching its 34th record close in 2024. The S&P 500 jumped about 0.5% during the day’s session, while the Nasdaq advanced 0.9% as Tesla and Nvidia shares jumped. The 30-stock Dow added 0.17%, or 67.87 points, to end the week in the green as well.
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