Stock futures are rising in premarket trading as investors await today’s PPI inflation report. The figures, along with tomorrow’s CPI numbers, could feed into the Federal reserve’s thinking on interest rates.
Big Tech stocks are leading the nascent rally, continuing to rebound after a recent selloff.
Elsewhere, global markets will be watching rising tensions in the Middle East. Oil prices spiked yesterday on fears that Iran will attack Israel but are edging down in early trading Tuesday.
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Stocks kicked off the week by taking a breather–but looked set to rally again Tuesday as investors geared up for a barrage of fresh inflation data that could help set the market’s expectations for the rest of 2024. Tech stocks were leading the charge.
Futures for the Dow Jones Industrial Average were up 60 points, or 0.2%, putting the gauge on course to erase its Monday losses. The S&P 500 climbed 0.3% in premarket trading, after the benchmark stock market index had finished the previous session trading flat. Futures for the tech-heavy Nasdaq 100 were rising 0.5% amid a Big Tech comeback.
In Asia, Japan’s flagship Nikkei 225 closed 3.5% higher, meaning the Tokyo index has now erased all its losses from last Monday’s plunge. The yen has been steady in recent days, helping to ease investors’ concerns after the Bank of Japan appeared to take a hawkish stance on interest rates last week.
Markets will be keeping a close eye on the Bureau of Labor Statistics’ monthly producer price index (PPI) inflation report, the first of a barrage of macroeconomic data set to be released this week. A higher-than-expected reading would make it tougher for the Federal Reserve to justify cutting interest rates at its next meeting in September.
Investors are also likely to zero in on the consumer price index (CPI) print, due out on Wednesday, as well as Thursday’s retail sales data, which will give insight into how much American shoppers are spending amid worries about an economic slowdown.
“This week the big news will be inflation, namely the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday,” Louis Navellier, Chairman and Founder of Navellier & Associates, said in a daily market commentary.
“The PPI has been well-behaved, but wholesale service and goods costs will be closely scrutinized. The CPI is also expected to be favorable, but all eyes will be on shelter costs, namely owners’ equivalent rent,” he added.
Oil prices fell despite the U.S. warning that Iran could be set to strike Israel in an attack that would likely destabilize the Middle East. Brent crude fell 0.5% to below $82 a barrel, while the West Texas Intermediate benchmark was down by the same amount to just under $80.
Bond yields were down over the past 24 hours. Yields on benchmark 10-year U.S. Treasury bonds were at 3.91%, and rates for the 2-year Treasury note were 4.02%.
It’s the usual suspects that are powering early-morning gains in the U.S.
Nvidia’s shares climbed 1.6% to just under $111 in the premarket, with investors “buying the dip” as excitement builds ahead of the AI chip maker’s earnings, set to be published on August 28.
The other so-called Magnificent Seven Big Tech stocks–iPhone manufacturer Apple, software giant Microsoft, Google owner Alphabet, e-commerce titan Amazon, Facebook parent Meta Platforms and Elon Musk’s EV maker Tesla–were also trading in the green ahead of the opening bell.
Roundhill’s Magnificent Seven exchange-traded fund, which tracks the mega-cap group, rose 1%.