Ankika Biswas and Lisa Pauline Matakal
(Reuters) – U.S. stock index futures rose on Monday ahead of the release of the manufacturing Purchasing Managers’ Index (PMI) and also focused on labor market data later in the week for an indication of the direction of Federal Reserve monetary policy.
AI chip company Nvidia fell 1.0% in premarket trading following a volatile trading session last week and weakness in other semiconductor stocks. Large caps including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. rose 0.4% to 0.9%.
Attention will be on the ISM and S&P Global Manufacturing PMI later in the day, following Friday’s release of the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, which was unchanged in May, highlighting slowing inflation and solid economic growth.
This week also sees the release of JOLTS jobs data on Tuesday, ADP employment, factory orders and ISM services PMI data on Wednesday, as well as minutes from the Fed’s latest policy meeting.
Nonfarm payroll data is due to be released on Thursday, when stocks will be closed for Independence Day.
According to LSEG FedWatch, traders have broadly maintained their expectations of around two rate cuts this year since September.
Comments from New York Fed President John Williams are also due later on Monday.
The Nasdaq and the benchmark S&P 500 recorded their third straight quarterly gains on Friday, the tech-heavy index’s first gain in three years.
“It’s halftime and certainly party time, at least for companies in the large-cap, market-cap-weighted indexes or the Magnificent Seven,” wrote Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
“The market continues to be unconcerned about the Fed delay, geopolitical issues, or the postponement of the US election. July should be focused on earnings releases and, more importantly, outlooks for the second half of 2024.”
The heavy weighting of the top few stocks is largely behind Wall Street’s rally fueled by optimism about artificial intelligence and interest rate cuts, while the blue-chip Dow Jones Industrial Average is down quarterly and lagging other stock indexes.
The lack of a broader rally has market participants concerned about whether the lopsided rally can be sustained and urging investors to further diversify their holdings.
As of 7:25 a.m. ET, the Dow e-mini was up 93 points (0.24%), the S&P 500 e-mini was up 12.5 points (0.23%) and the Nasdaq 100 e-mini was up 45.75 points (0.23%).
Spirit AeroSystems rose 4.7% after Boeing agreed to buy the company back for $4.7 billion in stock. Boeing shares were down 0.4%.
Chewy shares soared 15.3% after stock influencer Keith Gill, also known as “Roaring Kitty,” revealed he owns 6.6% of the pet supplies retailer.
Pet specialty store Petco Health & Wellness rose 1.9%, while shares of video game retailer GameStop, another favorite of Gill’s, fell 6.6%.
U.S.-listed shares of Chinese electric vehicle maker Li Auto rose 3.5% after its vehicle shipments in June rose 46.7% from the same month last year.
Cryptocurrency-related stocks Coinbase Global, Riot Platforms, Marathon Digital and MicroStrategy rose between 1.8% and 1.9% as bitcoin prices rose 3% to their highest in a week.
(Reporting by Ankika Biswas and Lisa Matakal in Bengaluru; Editing by Shaunak Dasgupta)
