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U.S. stock index futures retreated on Monday, June 10th, relinquishing some of the previous week’s strong gains as investors braced for the upcoming Federal Reserve meeting and the release of crucial inflation data.
Market Overview
- Dow Jones Futures: Down 0.2%
- S&P 500 Futures: Down 2.1%
- Nasdaq 100 Futures: Down 0.1%
The main indices experienced minor losses on Friday after a surprisingly strong nonfarm payrolls report prompted a reassessment of expectations regarding the central bank’s rate-cutting cycle. Heightened political uncertainty in Europe, following a rightward shift in the European Union elections, further contributed to the cautious sentiment.
Despite Friday’s declines, Wall Street indexes remained near record highs achieved last week, fueled by gains in heavyweight technology stocks, particularly market darling Nvidia.
Fed Meeting and Inflation Data in Focus
The primary focus this week is the conclusion of a Federal Reserve meeting on Wednesday. While the central bank is expected to maintain current interest rates, market watchers are eager to gauge the number of rate cuts officials will signal for the remainder of 2024. The updated dot plot is anticipated to indicate two 25-basis point cuts this year, down from three in March.
Following the unexpectedly strong May jobs data, Citi economists now predict that the Federal Reserve will commence rate cuts in September instead of July.
Consumer price index inflation data, also due on Wednesday before the Fed’s announcement, is expected to reveal inflation levels comfortably exceeding the central bank’s target range. Inflation has been a key factor in the Fed’s interest rate decisions, and this data could significantly impact markets ahead of Fed Chair Jerome Powell’s post-meeting press conference.
Corporate Highlights
Nvidia is expected to remain in the spotlight after the AI chipmaker’s 10% advance last week, propelled by a 10-for-1 split announcement that pushed its market capitalization past $3 trillion for the first time. Goldman Sachs views such stock splits as near-term positives for shares.
Apple will also be in focus as it unveils its integration of artificial intelligence across its software suite at its annual developer conference on Monday. This includes a revamped Siri voice assistant and a potential collaboration with ChatGPT owner OpenAI.
