US stock futures wavered on Monday as investors weighed the Federal Reserve's next policy move and awaited a slate of retail earnings this week. Futures on the Dow Jones Industrial Average (YM=F) slipped 0.1%. Those on the S&P 500 (ES=F) traded near the flat line after the benchmark index posted its third straight weekly gain.
Contracts for the Nasdaq-100 (NQ=F) rose 0.4% after a relatively calm week on Wall Street. Investor attention turns toward retail earnings and oil prices this week, with fewer market-moving economic data releases on the calendar. Big-box stores, including Walmart (WMT), Target (TGT), Lowe's (LOW), and Home Depot (HD), report quarterly results this week, providing insights into consumer health during the important back-to-school shopping season.
Traders, meanwhile, pulled back the odds of a September rate hike at the Fed's Jackson Hole meeting to less than one-third, as inflation and jobs data have created a mixed economic picture. Oil prices remain a key factor for markets and the Fed as the US takes an economic approach to the war in the Middle East. Brent crude (BZ=F) futures, the international benchmark, edged up to $88 per barrel on Monday.
At the same time, financial markets have tightened, with the 10-year (^TNX) and 30-year (^TYX) Treasury yields rising 5 basis points as of Friday's close. The Federal Open Market Committee meeting minutes, released on Wednesday, could offer more clues into the Fed officials' thinking. Economic data: Empire manufacturing, August (10 expected, 15.6 previously); NAHB housing market index, August (33 expected, 34 previously) Catch up on some top stories from over the weekend: Markets just flipped the script on Kevin Warsh's Fed As jobs disappear, could economic mobility be for sale?
Why Medicare Advantage providers are cutting plans Anthropic CEO says AI backlash is ‘fundamentally a crisis of trust’ Skyrocketing beef prices have Americans reaching their limit With stocks back at all-time highs, Wall Street strategists see signs that all that spending on AI is starting to pay off — at least for the megacap hyperscalers and their booming cloud businesses. "We are seeing signs that the spending is leading to earnings," Keith Lerner, chief investment officer at Truist, told Yahoo Finance. JPMorgan analysts lifted their price target on the S&P 500 (^GSPC) to 8,000 from 7,800 last week, citing not only strong earnings and upward guidance revisions but also strong demand for cloud, in which companies rent computing power and storage. … Although free cash flow is expected to remain negative in FY27 for most hyperscalers, the business they have lined up is growing faster than their spending, a sign that demand is starting to catch up with all that capital expenditure, said JPMorgan strategist Dubravko Lakos-Bujas.
"This suggests that monetization may start ramping faster than spending, which should support stronger future revenue growth and further alleviate concerns about return on invested capital," the analyst said.
Extract — continue reading at the source.
