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Futures steady with inflation data, earnings in focus.

News Team

U.S. stock index futures were little changed on Monday, at the beginning of a packed week that includes the release of a key inflation reading, Congressional testimony from Federal Reserve Chair Jerome Powell and the start of earnings season.

Expectations for interest-rate cuts as early as September received a further boost after Friday’s nonfarm payrolls report showed U.S. job growth slowed in June, the latest data to point to weakness in the labour market.

Investors, however, are focused on picking up clues for a clearer picture of the Fed’s monetary policy path for the rest of the year.

Traders now see a 69% chance of a 25-basis-point cut at the Fed’s September meeting, up from 60% a week ago, while expecting an overall cut of about 50 bps for the year, according to CME’s FedWatch and LSEG data.

On the economic data front, Thursday’s release of June’s consumer price index data will be closely watched to indicate whether price pressures are easing.

On a monthly basis, U.S. headline inflation is expected to rise slightly, by 0.1%, from a flat reading in the previous month, while core inflation is expected to rise 0.2%.

The S&P 500 and the Nasdaq continued to rally on Friday, closing at all-time highs as megacap tech stocks such as Meta Platforms and Microsoft touched record highs.

Tesla shares slipped about 1% in premarket trading, after jumping to their highest level this year on Friday, while Nvidia gained 0.6%.

Major banks including Citigroup, JPMorgan Chase and Wells Fargo are scheduled to kick off the second-quarter corporate earnings season on July 12.

Shares of JPMorgan slipped 0.3% in premarket trading after broad losses saw the S&P 500 banks index ended Friday’s session down 1.6%.

Investors are focusing on the earnings season to see if a stratospheric jump in shares of just a handful of mega-cap stocks such as Nvidia can justify their pricey valuations.

“The U.S. Q2 corporate earnings season is going to be one of the pivotal keys for equity sentiment for the remainder of the year,” said Marc Ostwald, global strategist at ADM Investor Services International.

“Year to date, only 24 companies have outperformed the S&P 500 index, making for a rather fragile and lopsided performance profile.”

Markets will also closely watch Powell’s semi-annual testimony before U.S. Senate and House committees on July 9 and 10, as well as comments from several other Fed officials throughout the week.

At 7:18 a.m. ET, Dow e-minis were up 22 points, or 0.06%, S&P 500 e-minis remained unchanged, and Nasdaq 100 e-minis were down 2 points, or 0.01%.

Paramount Global rose 2.5% after Sunday’s announcement that the company would merge with Skydance Media, which has offered $4.5 billion in cash or stock and an extra $1.5 billion to shore up Paramount’s balance sheet.

Planemaker Boeing gained 1.0% after it agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million, to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes.

Source: https://finance.yahoo.com/news/futures-flat-inflation-data-earnings-104725972.html