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After strong gains this year, U.S. equities have lost momentum
in August, with the tech-heavy Nasdaq posting two straight weeks
of declines for the first time in 2023 on Friday.
Hotter-than-expected U.S. producer prices data last week fanned
concerns that the Federal Reserve could keep interest rates
higher for longer, driving up U.S. Treasury yields and weighing
on rate-sensitive big technology and growth stocks.
On Monday, as the yield on 10-year government treasuries ticked
lower, shares of Microsoft, Nvidia and Meta Platforms rose
between 0.2% and 0.5% in premarket trading.
Tesla, however, fell 1.7% after the electric automaker said it
has cut prices in China for some Model Y versions.
A majority of traders expect the Fed to keep rates unchanged
next month and hold them at that level for the rest of the year,
according to CME Group's Fedwatch tool.
Goldman Sachs expects the Fed to start cutting rates in the
second quarter of 2024, but has cautioned that rates could hold
steady if inflation does not cool fast enough.
Market focus will be on quarterly earnings from major U.S.
retailers including Walmart and Target this week. Economic data
expected includes retail sales for July as well as industrial
production and jobless claims numbers.
Keeping a lid on global market sentiment were concerns about
China's highly leveraged property sector after the country's top
private property developer said it will suspend trading of its
onshore bonds from Monday.
At 5:22 a.m. ET, Dow e-minis were up 69 points, or 0.2%, S&P 500
e-minis were up 11.5 points, or 0.26%, and Nasdaq 100 e-minis
were up 60.75 points, or 0.4%.
AMC Entertainment common shares fell 26.8% in premarket trading
after a Delaware judge approved the theater chain's revised
stockholder settlement on Friday. The company's preferred stock
surged 27.5%.
Shares of Nikola dropped 15.4% after the company said on Friday
it was recalling all the battery-powered electric trucks
delivered till date and is suspending sales after a probe into
recent fires.
(Reporting by Amruta Khandekar in Bengaluru; Editing by Arun
Koyyur)
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