(Reuters) – U.S. stock index futures edged higher on Monday as most megacap growth stocks steadied after a selloff in the previous session, while investors awaited quarterly reports from U.S. retail giants and economic data later in the week.
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)
