Investing.com-- U.S. stock index futures slipped slightly Monday as investors looked to testimony by Federal Reserve Chair Jerome Powell and key inflation data for more cues on interest rates this week.
At 06:20 ET (10:20 GMT), Dow Jones Futures fell 16 points, or 0.1%, S&P 500 Futures fell 3 points, or 0.1%, and Nasdaq 100 Futures fell 9 points, or 0.1%.
Futures steadied after Wall Street surged to record highs on Friday, as softer-than-expected nonfarm payrolls data ramped up optimism that the Fed will begin cutting interest rates by September.
Powell set to testify, CPI data approaches
Powell will testify before the Senate and the House on Tuesday and Wednesday, respectively, with the bulk of his testimony expected to focus on monetary policy.
Powell had signaled last week that while the Fed had made some progress towards bringing down inflation, policymakers still did not have enough confidence to begin trimming rates. The minutes of the Fed’s June meeting furthered this notion.
Weaker-than-expected labor data from last week ramped up hopes that the labor market was cooling, giving the Fed more impetus to begin cutting interest rates.
But inflation is likely to be the central bank’s key point of consideration in reducing interest rates. The consumer price index is due on Thursday, and is expected to rise 0.1% MoM and 3.1% YoY. The core CPI is expected to increase by 0.2%.
Traders were seen pricing in an over 72% chance for a 25 basis point cut in September, up from a 57.9% chance seen last week.
Q2 earnings to begin this week
Beyond rate expectations, the focus this week will be on the second-quarter earnings season, which is set to begin with a slew of heavyweight bank earnings on Friday.
Markets will be watching to see just how robust corporate earnings remained under pressure from high interest rates and sticky inflation.
JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) are set to report earnings on Friday.
Numbers from PepsiCo (NASDAQ:PEP) and Delta Air Lines (NYSE:DAL) are also die this week.
Elsewhere, Skydance Media and Paramount Global (NASDAQ:PARA) have agreed to merge, the companies announced late Sunday evening, ending months of speculation, while Boeing (NYSE:BA) has agreed to plead guilty to a criminal fraud conspiracy charge to resolve a U.S. Justice Department investigation into two 737 MAX fatal crashes.
Crude retreats after recent gains
Crude prices slipped lower Monday, handing back some of the gains seen over the last four weeks, on easing geopolitical tensions in the Middle East.
By 06:40 ET, the U.S. crude futures (WTI) fell 1% to $82.37 a barrel, while the Brent contract dropped 0.8% to $85.87 a barrel.
Talks over a U.S. ceasefire plan aimed at ending the nine-month-old war in Gaza are under way, and being mediated by Qatar and Egypt.
Concerns over the Israel-Hamas conflict spreading to the wider Middle East region, potentially disturbing the supply of crude, have provided support for the oil markets.
Elsewhere, Hurricane Beryl is expected to make landfall in the middle of the Texas coast later on Monday, potentially passing through the biggest oil exporting regions in the state.
(Ambar Warrick contributed to this art
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