US stock futures largely higher; inflation cues in focus this week

Investing.com -- U.S. stock index futures largely edged higher Monday, remaining near record highs as investors looked to key inflation data this week for more cues on interest rates.

At 06:00 ET (10:00 GMT), Dow Jones Futures rose 130 points, or 0.3%, S&P 500 Futures climbed 5 points, or 0.1%, while Nasdaq 100 Futures fell 20 points, or 0.2%.

The main indices had a weak close last week after the release of stronger-than-expected purchasing managers index readings from last week, which pushed up concerns that the U.S. economy remained robust, giving the Federal Reserve more headroom to keep rates high.

However, enthusiasm surrounding artificial intelligence resulted in weekly gains, with the S&P 500, a broad-based benchmark index, hitting a new intraday record. It is up almost 15% so far this year, while the tech-heavy Nasdaq Composite has gained almost 18%.

The blue-chip Dow Jones Industrial Average has lagged, by contrast, gaining just under 4% in the first half of the year.

PCE inflation due this week

Markets are focused chiefly this week on PCE inflation data, which is due Friday.

The reading is the Fed’s preferred inflation gauge, and is likely to tie into the central bank’s stance on interest rate cuts.

The PCE reading is expected to show inflation cooled slightly in May, but remained well above the Fed’s 2% annual target.

Expectations of an eventual lowering in interest rates had driven Wall Street indexes to record highs through June, even as the Fed signaled that sticky inflation and a strong economy kept chances of such a scenario slim.

Wall Street also appeared due for some profit-taking, especially in the technology sector, after a stellar run-up this year.

Fedex, Micron earnings on tap

Some key quarterly earning prints were also on tap this week.

Delivery and logistics firm FedEx (NYSE:FDX), whose earnings are also viewed as a bellwether for global economic activity, is set to report its earnings for the quarter ended May on Tuesday.

Memory chip maker Micron Technology (NASDAQ:MU) is set to report its quarterly earnings on Wednesday, after forecasting a major demand spike from the fast growing artificial intelligence industry.

Sports apparel maker Nike (NYSE:NKE) and pharmaceutical retailer Walgreens Boots Alliance (NASDAQ:WBA) are set to report earnings on Thursday.

Crude edges higher on demand hopes

Crude prices edged higher Monday, continuing the previous week’s positive tone on signs of stronger oil products demand in the U.S., world's largest consumer.

By 06:00 ET, the U.S. crude futures (WTI) traded 0.4% higher at $81.07 a barrel, while the Brent contract climbed 0.5% to $84.72 per barrel.

Both benchmarks gained around 3% last week after data from the Energy Information Administration showed a hefty drawdown in U.S. crude stockpiles, pointing to healthy demand as the summer driving season kicks into top gear.

The market also received support from worsening geopolitical conditions as the risk of an all-out war between Israel and Hezbollah, as an extension of the conflict with Hamas, rises, playing into expectations of supply disruptions in the Middle East.

Continued clashes between Russia and Ukraine, with Kyiv targeting major Russian refineries, also spurred concerns over supply disruptions.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com