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U.S. stock index futures saw a slight uptick on Monday, hovering near record highs as investors eagerly awaited this week’s crucial inflation data for insights into the future trajectory of interest rates.
Early morning trading saw Dow Jones Futures rise 0.3%, S&P 500 Futures climb 0.1%, and Nasdaq 100 Futures dip 0.2%. This mixed performance follows a subdued close last week, triggered by stronger-than-expected purchasing managers index readings, which fueled concerns about a robust U.S. economy and potentially higher interest rates.
Despite last week’s slight dip, the markets have enjoyed a remarkable year so far, driven by enthusiasm surrounding artificial intelligence. The S&P 500 reached a new intraday record, boasting an almost 15% gain year-to-date, while the tech-heavy Nasdaq Composite soared nearly 18%. The Dow Jones Industrial Average, however, has lagged behind with a more modest 4% gain.
All eyes are now on the upcoming PCE inflation data, the Federal Reserve’s preferred inflation gauge, due to be released on Friday. This reading is expected to reveal a slight cooling in inflation in May but will likely remain above the Fed’s 2% annual target. The data will be crucial in shaping the central bank’s stance on potential interest rate cuts, which have been a key driver of Wall Street’s recent record highs.
Alongside the inflation data, investors are also keeping a close watch on key quarterly earnings reports. FedEx, a bellwether for global economic activity, is set to release its earnings on Tuesday, while memory chip maker Micron Technology, which anticipates a significant demand spike from the burgeoning artificial intelligence industry, will report on Wednesday. Nike and Walgreens Boots Alliance are also slated to release their earnings on Thursday.
In the energy sector, crude prices saw a modest increase on Monday, continuing the previous week’s positive trend. This rise is attributed to signs of stronger oil products demand in the U.S. and escalating geopolitical tensions in the Middle East and Ukraine, which have fueled concerns about potential supply disruptions.
As the week unfolds, investors will also be monitoring geopolitical developments, including the first U.S. presidential debate on Thursday and the first round of voting in the French election over the weekend. These events could further influence market sentiment and add another layer of complexity to the already dynamic landscape of global finance.
