US stock futures turn lower; Fed speakers, inflation and earnings in focus

U.S. stock index futures slipped lower Monday, handing back some of last week's gains after the strong payrolls data, with the focus turning to more cues on interest rates and corporate earning in the coming days. 

At 05:35 ET (09:35 GMT), Dow Jones Futures fell 210 points, or 0.5%, S&P 500 Futures dropped 33 points, or 0.6%, and Nasdaq 100 Futures slipped 145 points, or 0.7%. 

Wall Street rose sharply on Friday after stronger-than-expected nonfarm payrolls data helped abate concerns over a slowing U.S. economy, but also quashed expectations over more steep interest rate cuts in the coming months.

Goldman Sachs strategists cut their 12-month recession probability by 5 percentage points to 15%, in the wake of the September employment report.

"Strong September job gains and upward revisions have for now calmed fears that labor demand might be too weak to prevent the unemployment rate from continuing to trend higher," the strategists said in a note.

The Dow Jones Industrial Average rose 0.8% to a record high on Friday, the S&P 500 gained 0.9%, just below record levels, while the NASDAQ Composite rose 1.2%.  Fed comments, CPI inflation on tap

Focus this week was squarely on more signals from the Fed, with a slew of officials set to speak in the coming days. Rate-setting committee members Michelle Bowman and Neel Kashkari are set to speak later on Monday, as is Raphael Bostic .

Their addresses come before the minutes of the Fed's September meeting , which are due on Wednesday. The Fed had cut rates by 50 bps during the meeting and marked the start of an easing cycle.

Consumer price index inflation data for September is also due later this week, and is likely to factor into expectations for the path of U.S. interest rates. Banks set to kick off Q3 earnings season 

The third-quarter earnings season is set to start this week, with major banks JPMorgan Chase (NYSE:JPM ), Wells Fargo (NYSE:WFC ) and Bank of New York Mellon (NYSE:BK ) set to report quarterly earnings on Friday. 

Markets will be watching to gauge whether corporate earnings persevered against pressure from high interest rates and sticky inflation. 

Bullish investors are hoping results will justify increasingly rich valuations in the stock market. The S&P 500 is up 20% for the year so far and is trading near record highs despite recent volatility spurred by rising geopolitical tensions in the Middle East. Crude pushes higher 

Oil prices rose once more Monday, adding to the previous week's hefty gains, as traders eyed ongoing tensions in the Middle East.

By 05:35 ET, the Brent contract had risen by 2.1% to $79.69 per barrel, while U.S. crude futures (WTI) traded 2.4% higher at $76.16 a barrel.

Oil prices last week recorded their biggest weekly gains in over a year on the mounting threat of a region-wide war in the Middle East. Israel has sworn to strike Iran for launching a barrage of missiles at the country in retaliation for the assassination of the leader of Tehran-backed Hezbollah.

(Ambar Warrick contributed to this article.)

 

Source: Investing.com