U.S. stock futures are higher, with bond yields steady, as traders eye a data-rich week.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.42%
rose 17 points, or 0.4% to 4479 -
Dow Jones Industrial Average futures
YM00,
+0.13%
gained 75 points, or 0.2% to 35009 -
Nasdaq 100 futures
NQ00,
+0.70%
climbed 93 points, or 0.5% to 15587
On Friday, the Dow Jones Industrial Average
DJIA
rose 76 points, or 0.22%, to 34577, the S&P 500
SPX
increased 6 points, or 0.14%, to 4457, and the Nasdaq Composite
COMP
gained 13 points, or 0.09%, to 13762.
What’s driving markets
Futures indicate stocks will look to rally Monday, following a choppy holiday-shortened week that saw the S&P 500 dip 1.3%.
“One primary catalyst behind this recent volatility has been the relentless surge in oil prices, which has exacerbated concerns about inflation precisely when many major central banks had hoped to conclude or be in the final stages of their interest rate hikes,” said Stephen Innes, managing partner at SPI asset management.
“Bond yields, which had briefly eased in late August, resumed their upward climb, with 10-year Treasuries hovering around the 4.3% mark midweek before settling somewhat,” Innes added.
Oil was little changed Monday, and benchmark yields held near those levels as traders looked ahead to data later in the week that will give important updates on the health of the U.S. consumer and inflationary pressures in the economy.
The August U.S. consumer price index will be published Wednesday, and the August retail sales report is due Thursday, with both likely to impact the Federal Reserve’s thinking as it considers whether to change interest rates at its policy meeting next week.
For now, the market is pretty certain the Fed will leave borrowing costs at a range of 5.25% to 5.50%.
“Interest rate debates remain a central plank in investor thinking, with more inflationary data to come this week which could move the needle,” said Richard Hunter, head of markets at Interactive Investor.
Tom Lee, head of research at Fundstrat, noted that the market was also welcoming a report in the Wall Street Journal suggesting the Fed now thinks “the burden has shifted toward evidence of an accelerating economy to justify higher rates.”
“[I]f the incoming data continues to be softer (on inflation), the Fed likely shifts away from ‘data dependency’ towards looking at more forward measures. The media article referenced reflects this, with the nuance that accelerating economic growth could pose a risk to this view,” said Lee in a note.
“But we still see equity markets higher by year-end and once we are through this continued chop, we see S&P 500 rising to 4,750 or greater by year-end,” he added.
Nasdaq 100 futures were looking chipper as shares of Tesla
TSLA,
jumped nearly 6% on an upgrade from equal-weight to overweight by Morgan Stanley.
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