Market Snapshot: U.S. stock futures set for modest gains as investors wait for pivotal data

U.S. stock futures edged higher on Monday, as investors looked ahead to a week that will deliver important inflation and employment data, following a cautious view from Federal Reserve Chairman Jerome Powell last week.

What’s happening

  • Dow Jones Industrial Average futures YM00 rose 102 points, or 0.3%, to 34,479.
  • S&P 500 futures ES00, +0.49% were up 10 points, or 0.2%, at 4,424.25.
  • Nasdaq-100 futures NQ00, +0.71% advanced 53.50 points, or 0.4%, to 15,032.75.

Stocks bounced on Friday, with the S&P 500 SPX and the Nasdaq Composite  COMP snapping a string of three straight weekly losses, while the Dow DJIA saw a 0.4% weekly fall.

What’s driving markets

Investors were set to pick up where they left off Friday, when stocks gained after Powell said the jury was still out on whether inflation and a strong U.S. economy needed to be tempered, but that monetary policy would proceed cautiously.

Jackson Hole recap: Fed rate hikes likely on hold for ‘several meetings’

“In the end, it did not change the needle much,” Allan von Mehren, chief analyst at Dankse Bank, said in a note to clients. “Those believing in a Fed pivot early next year still have arguments to do so, and vice versa. Hence, equities finally rose with U.S. equities particularly strong.”

“More importantly, Powell did not say anything to hinder investor appetite for large cap growth stocks. Consumer discretionary and tech outperformed, large cap outperformed small cap and growth were generally preferred over value,” said von Mehren.

See: Fed’s Powell left investors with a cloud of uncertainty, and the U.S. stock market faces a difficult week ahead

Powell, however, kept the possibility of further rate hikes “firmly on the table during his Jackson Hole speech, as inflation still remains above its 2% target, and the central bank is committed to that target,” said Rod von Lipsey, managing director at UBS Private Wealth Management, in emailed comments.

“This week’s core PCE figures and the next CPI report in mid-September will be of extra importance in gauging how the Fed may act at its late September meeting,” he said. “Based on the Fed’s continued commitment to curtailing inflation, we believe that the market has been overly optimistic about the end point of restrictive policy rates.”

The central bank will be paying close attention to the data set to be released, with its preferred inflation measure, the July personal consumption expenditure index, due on Thursday, followed by August payroll data on Friday.

The month of August is also winding down, with the S&P 500 down 3.9% and poised for its first monthly loss since February, as the summer has seen the 2023 rally for stocks stall amid a cooling of tech stocks. Down over 5% for August so far, the Nasdaq Composite is also set for its first monthly loss since February.

Elsewhere, Treasury yields BX:TMUBMUSD10Y were softer with that of the 10-year note down 1 basis point to 4.222%.

In China, stocks climbed after the Finance Ministry and the country’s stock market regulator rolled out measures to spark buying interest in stocks, such as a halving of a tax on stock trades and limiting sales by big shareholders in companies that haven’t handed out enough dividends.

China’s CSI 300 XX:000300 climbed more than 1%, though shares of indebted property developer China Evergrande Group EGRNF, +900.00% tumbled 78% in Hong Kong after a return to trading after more than a year.

Companies in focus

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