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Traders are awaiting inflation data on Wednesday that is
expected to show U.S. consumer prices rose 8.8% in June from a
year earlier, marking a fresh four-decade high and adding more
pressure on the Federal Reserve to act on soaring prices.
Analysts are also tempering their profit estimates as the
earnings season kicks off in earnest this week, with reports
from JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co
among others.
Overall S&P 500 earnings are expected to rise 5.7% in the second
quarter, compared with the earlier forecast of 6.8%, according
to recent IBES data from Refinitiv.
A stronger-than-expected jobs report last week cemented
expectations for a second straight 75-basis-point rate hike
later in July, raising fears that aggressive moves by the
central bank will tip the economy into a recession.
A number of Fed speakers are also scheduled to speak this week
and their comments will be parsed for any change in the Fed's
hawkish stance on inflation.
Exacerbating worries of slowing global growth, several cities in
China are adopting fresh COVID-19 curbs from this week to rein
in new infections after finding a highly transmissible Omicron
subvariant.
All three benchmark indexes ended lower on Monday, after posting
solid gains last week, with market leading growth stocks
dragging down the Nasdaq..
At 07:03 a.m. ET, Dow e-minis were down 271 points, or 0.87%,
S&P 500 e-minis were down 29.25 points, or 0.76%, and Nasdaq 100
e-minis were down 56.75 points, or 0.48%.
PepsiCo Inc raised its full-year revenue forecast, helped by
sustained demand for its sodas and snacks, sending shares of the
soda maker up 0.7% in premarket trading.
Shares of Broadcom Inc, Advanced Micro Devices Inc and Nvidia
Inc fell between 0.6% and 1.1% after Cowen & Co cut its price
target for the chip companies on macroeconomic challenges.
(Reporting by Amruta Khandekar in Bengaluru; Editing by Anil
D'Silva)
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