Stock Market

Market Anticipation Shifts: Futures Decline Ahead of Inflation Data Release.

U.S. stock index futures experienced a slight decline on Monday as investors eagerly anticipated a pivotal inflation report and other economic indicators scheduled for release during the week. These data points carry significant weight in shaping expectations regarding the duration of the Federal Reserve’s maintenance of elevated interest rates.

Closing near eight-week highs on Friday, the benchmark S&P 500 and the blue-chip Dow, along with the Nasdaq Composite reaching a two-month peak, reflected a market buoyed by the rally of megacap stocks amid easing Treasury yields.

The upcoming week promises a focus on various economic metrics, coupled with keen attention to speeches from Federal Reserve officials. This scrutiny stems from the growing belief that the Fed has concluded its series of interest rate hikes. On Tuesday, inflation data is projected to reveal a slight easing, with headline consumer prices expected to drop from 3.7% in September to 3.3% in October, while core rates remain steady.

Despite this positive momentum, Moody’s decision to downgrade the U.S. credit rating outlook from “stable” to “negative” added a note of caution on Monday. This move, following a similar action by Fitch earlier in the year, had minimal impact on the Treasury market. Meanwhile, the U.S. 10-year Treasury yield, at 4.632%, remained relatively steady, albeit below the 16-year peak witnessed last month.

In the political arena, U.S. House of Representatives Speaker Mike Johnson’s proposal for a Republican stopgap spending measure aimed at avoiding a government shutdown faced immediate opposition from lawmakers in both parties. As of 7:08 a.m. ET, Dow e-minis were down 0.08%, S&P 500 e-minis down 0.17%, and Nasdaq 100 e-minis down 0.2%.

Notable market movements included Boeing’s 3.7% premarket climb, driven by reports suggesting China’s contemplation of resuming purchases of 737 Max aircraft during the upcoming APEC summit. Additionally, Dubai’s Emirates announced a substantial order for 90 Boeing 777X jets at the Dubai Airshow. Conversely, Micron Technology experienced a 0.8% slip following a lawsuit from Chinese chipmaker Yangtze Memory Technologies alleging patent infringement. On a positive note, Eli Lilly rose 1% after rival Novo Nordisk attributed protective benefits of its Wegovy obesity treatment to factors beyond weight loss.

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