(Bloomberg) — U.S. stock futures rose, reversing earlier losses, as traders focused on inflation data released later this week to gauge the Federal Reserve's interest rate path.
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The S&P 500 and Nasdaq 100 contracts rose 0.3%. On Monday, both indexes fell and U.S. Treasury yields rose as traders cut bets on expectations for interest rate cuts. Treasury borrowing costs were stable at around 4% as of Tuesday.
“Overall, global risk appetite remains positive,” said Benoît Hain, investment director at MFS Investment Management. “The fundamental story remains strong and the U.S. labor market remains in good shape. The direction for interest rates will remain low.”
In premarket trading, supermicrocomputers rose after shipping data suggested solid demand for the company’s servers, while the Wall Street Journal reported that the company plans to spin off its advanced materials division. Honeywell rose in response.
On the downside, U.S.-listed Chinese stocks fell sharply after China’s latest pledge to support its economy disappointed investors hoping for new stimulus. This weighed on Europe’s Stoxx 600 index, with China-exposed stocks such as luxury goods companies Kering and Burberry bearing the brunt.
The focus will now turn to US consumer inflation statistics, with the year-on-year rate expected to slow to 2.3% from 2.5% last time. Traders are pricing in a rate cut at the November Fed meeting, but still see policy easing of about 48 basis points by the end of the year.
Inflation data is seen as particularly important given the ongoing U.S. hurricane season and worker strikes that could impact this month’s jobs report.
“The CPI data is probably more important than it has been in recent months as labor data becomes more uncertain going forward,” said Robert Dischner, senior portfolio manager at Neuberger Berman.
On the corporate front, major U.S. banks begin their earnings season in earnest on Friday, with corporate guidance for the coming quarter expected to be key.
Shaniel Ramsey, senior investment manager at Pictet Asset Management, said: “Most investors are now looking ahead to 2025 and taking guidance from the corporate sector on how they think about their earnings outlook for next year. I’m sure he’s trying.”
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Commodity markets also felt the lack of new Chinese stimulus, with Brent crude oil futures down about 2%.
This week’s main events:
Fed’s Rafael Bostic, Susan Collins, Philip Jefferson and Adriana Kugler speak on Tuesday
Fed Minutes, Wednesday
Fed’s Rory Logan, Rafael Bostic, Austan Goolsby and Mary Daly speak Wednesday
U.S. new jobless claims, CPI, Thursday
Fed’s John Williams and Thomas Barkin speak on Thursday
JPMorgan and Wells Fargo kick off earnings season for big Wall Street banks on Friday.
US PPI, University of Michigan Consumer Sentiment, Friday
Fed’s Laurie Logan, Austan Goolsby and Michelle Bowman speak on Friday
The main movements in the market are:
stock
As of 11:34 a.m. London time, the Stoxx European 600 was down 0.6%.
S&P 500 futures rose 0.3%
Nasdaq 100 futures rose 0.4%
Dow Jones Industrial Average futures rose 0.1%.
MSCI Asia Pacific Index falls 2.1%
MSCI Emerging Markets Index falls 2.1%
currency
Bloomberg Dollar Spot Index little changed
The euro rose 0.1% to $1.0988.
The Japanese yen rose 0.2% to 147.85 yen to the dollar.
The offshore yuan rose 0.2% to 7.0559 yuan to the dollar.
The British pound rose 0.1% to $1.3098.
cryptocurrency
Bitcoin fell 0.9% to $62,429.91.
Ether fell 0.5% to $2,428.54.
bond
The 10-year government bond yield was almost unchanged at 4.02%.
German 10-year bond yield remains unchanged at 2.25%
UK 10-year bond yield remains unchanged at 4.20%
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Sujata Rao and Aya Agatsuma.
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