Futures recover after Friday sell-off, Mideast tensions ease
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[April 22, 2024] (Reuters)
- U.S. stock index futures gained on Monday after slumping in the
previous session as easing Middle East tensions buoyed risk sentiment,
while investors looked ahead for an action-packed week with major tech
earnings and a key inflation print.
The Nasdaq and the S&P 500 ended lower on Friday as Netflix shares
weighed after a dour quarterly earnings report, with both the indexes
suffering six straight sessions of declines last week, their longest
losing streak since October 2022.
Nvidia led gains across megacap growth stocks with a 2.4% rise in
premarket trading, rebounding from a 10% drop in the last session.
Other stocks such as Meta Platforms, Amazon.com and Alphabet edged
higher between 0.3% and 0.9%.
Tesla, Meta Platforms, Alphabet and Microsoft will be in focus this week
as the companies gear up to deliver their quarterly numbers, whose
performance could further test the rally in U.S. stocks.
The risk-on mode was also supported by signs of easing tensions in the
Middle East, as Iran's foreign minister said on Friday Tehran was
investigating an overnight attack, adding that so far a link to Israel
had not been proven as he downplayed the strike.
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"Overnight, risk sentiment is better on relief rally that no adverse
geopolitical headlines were reported on the weekend," Mohit Kumar, chief
economist Europe at Jefferies, said in a note.
"Our cautious stance continues this week, though the repricing from last
week, particularly in tech stocks would give an opportunity to buy the
dip."
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid/File
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Equities have sold-off recently as market participants readjust
their interest rate cut expectations from the U.S. Federal Reserve
after a string of strong economic data signaling persistent
inflationary pressures.
Money markets are now pricing in just about 38 basis points (bps) of
rate cuts this year, down from about 150 bps seen at the beginning
of the year, according to LSEG data.
On the docket this week would be the price consumption expenditure (PCE)
index reading for March -- the Fed's preferred inflation gauge -- to
further ascertain the monetary policy trajectory.
At 5:38 a.m. ET, Dow e-minis were up 161 points, or 0.42%, S&P 500
e-minis were up 24 points, or 0.48%, and Nasdaq 100 e-minis were up
95.75 points, or 0.56%.
Among single stocks, Tesla fell 2.7% before the bell as the electric
vehicle maker cut prices in a number of its major markets, including
China and Germany, following price reductions in the United States.
Salesforce rose 3.4% after the business software maker backed away
from its talks to acquire data-management software firm Informatica
after the two companies could not agree on terms.
Informatica's shares were down 6.3%.
(Reporting by Shristi Achar A in Bengaluru; Editing by Maju Samuel)
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