Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

Dow futures flat ahead of key inflation data, bank earnings

Published 07/10/2023, 07:08 PM
© Reuters

Investing.com -- U.S. stock futures largely edged lower Monday, at the start of a week that includes key U.S. inflation data as well as the start of the new quarterly earnings season.

By 06:50 ET (10:50 GMT), the Dow Futures contract was flat, S&P 500 Futures traded 6 points, or 0.1%, lower and Nasdaq 100 Futures dropped 44 points, or 0.3%.

The three benchmark indices posted losing weeks last week, with the blue chip Dow Jones Industrial Average ending down 2%, the broad-based S&P 500 down 1.2% and the tech heavy Nasdaq Composite dropping 0.9%.

Although Friday’s nonfarm payrolls release showed a slowing of job creation in June from the prior month, the rest of the week’s labor market data pointed to an economy still strong enough to cope with more interest rate hikes.

June U.S. inflation data due

Confirmation of another hike by the Federal Reserve is likely to come with the release of the June U.S. consumer price index on Wednesday.

Although the headline figure is expected to cool to 3.1% annually, the slowest increase since March 2021, the core reading, which is closely watched by Federal Reserve policymakers, is seen rising by 5.0% year-on-year and 0.3% monthly.

As it was with the labor market data last week, these numbers are anticipated to influence the thinking of Fed officials, who have made corralling elevated inflation a central objective of its recent year-long campaign of policy tightening.

Citi downgrades U.S. stocks

Sentiment was hit with the release earlier Monday of weak Chinese inflation data, which fanned worries of a looming economic slowdown.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Citi equity strategists downgraded its stance on U.S. stocks to ‘neutral’ from ‘overweight’, following the strong gains year to date, saying “growth may be set for a pullback as AI euphoria enters a digestive phase. Recession risks remain elevated.”

Banks lead off second-quarter earnings season

Further clues about the likelihood of a recession could come with the second-quarter earnings reporting period, which kicks off this week, with the likes of JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and BlackRock (NYSE:BLK) all scheduled to report on Friday.

Overall, earnings for the S&P 500 constituents are expected to fall 5.7% in the second quarter, Refintiv data showed.

Crude falls on Chinese growth concerns

Oil prices fell Monday after the Chinese inflation data increased concerns that the recovery of the world's second-largest economy, and largest crude importer, was slowing.

By 06:50 ET, the U.S. crude futures traded 0.8% lower at $73.28 a barrel, while the Brent contract dropped 0.7% to $77.94.

Both benchmarks gained more than 4% last week to touch their highest marks since May, boosted by the world's biggest oil exporters Saudi Arabia and Russia announcing plans to deepen supply cuts in August.

Additionally, gold futures fell 0.2% to $1,929.55/oz, while EUR/USD traded 0.1% lower at 1.0958.

(Oliver Gray contributed to this item.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.