U.S. index futures climbed on Monday after the recent market rout, as investors girded up for a busy week marked by a Federal Reserve interest-rate decision, eagerly awaited tech earnings, and crucial labor data.
Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL), Amazon.com (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), and Tesla (NASDAQ: TSLA) were up between 0.5% and 0.8% in premarket trading after a recent sell-off in megacap tech shares saw Wall Street’s main stock indexes spiraling down last week.
At 5:40 a.m. ET, Dow e-minis were up 109 points, or 0.27%, S&P 500 e-minis were up 15.5 points, or 0.28%, and Nasdaq 100 e-minis were up 84.75 points, or 0.44%.
The three major U.S. stock indexes jumped more than 1% on Friday after hopes of an early start to monetary policy easing were boosted by an encouraging U.S. inflation report, close on the heels of recent data signaling a loosening jobs market.
However, the S&P 500 and the Nasdaq failed to recoup lost ground and closed the week lower after a disappointing start to tech earnings prompted the indexes to log their steepest one-day slide since 2022 on Wednesday.
The next round of earnings from Wall Street’s tech giants including Microsoft (NASDAQ: MSFT), Meta, Apple, and Amazon.com starts on Tuesday.
Investors will be on the watch for justifications for the over-stretched valuations of these high-momentum stocks, as well as signs that the AI-led equity rally has room to grow.
After Wall Street’s record-breaking run since the start of this year, concerns about the dominance of Big Tech have prompted investors to pull out of these top-tier stocks and pour into lagging sections such as mid and small caps, which are expected to benefit from a low-interest-rate environment.
Investors have now pinned their hopes on the Fed likely signaling a rate cut in September in its policy decision on Wednesday. Any hawkish commentary from central bank officials would likely put equities under renewed selling pressure.
Bets of a 25-basis-point cut by September have held around 88%, although they are sharply up from last month’s near 60%, according to CME’s FedWatch Tool.
A raft of employment reports through the week, such as the Job Openings and Labor Turnover Survey, ADP Employment, non-farm payrolls, and weekly jobless claims, will also be parsed for concrete clues on a somewhat easing labor market.
Among other movers, crypto stocks such as Coinbase Global (NASDAQ: COIN), Riot Platforms (NASDAQ: RIOT), Marathon Digital (NASDAQ: MARA), and MicroStrategy (NASDAQ: MSTR) gained around 4% each after bitcoin prices jumped to a seven-week high.
Abbott Laboratories (NYSE: ABT) dropped 7.6% after a jury ordered the healthcare company to pay $495 million in damages in a premature infant formula trial.
(Source: ReutersReuters)
