US stocks are set for a mute opening of the holiday shortened week. S&P 500 futures as well as Dow Jones futures were on a standstill ahead of the ISM Non-manufacturing Purchasing Managers Index (PMI) for June. Nasdaq 100 futures remained unchanged.
US Economic Concerns
S&P 500 index is shedding from a seven-day winning streak, its longest since August. The index closed in higher on Friday after better- than- expected US Nonfarm payrolls data.
According to the Bureau of Labor Statistics, the economy added 850,000 jobs in June. This surpassed the estimated forecast of 706,000. It was also higher than the previous 583,000 figure.
Many investors on Wall Street expect smaller and choppier gains for the rest of the year. The US economy has been booming for the first half of this year. S&P 500 index is up nearly 16% year to date.
US Treasury bonds weakened as traders weighed a jump in crude oil prices after a breakdown in OPEC+ supply talks. OPEC failed in its attempt to resolve a deadlock in oil production. Divisions between United Arab Emirates (UAE) and Saudi Arabia spilled into public and global financial markets.
OPEC called off a meeting scheduled for Monday with Russia. This was after UAE refused to agree to a Saudi-backed deal to boost output. Oil prices spiked to records high after the meeting was postponed indefinitely.
US oil benchmark West Texas Intermediate crude futures advanced 1.6% on Tuesday to $76.34 per barrel. WTI crude hit as high as $76.98 on the same day, the highest level since November 2014. International benchmark Brent crude was up 0.2% to $77.31, the highest level since late 2018.
Investors are gauging the prospective for the conflict to escalate to a price war. This could cause a slowdown in global economic recovery. It could also boost inflationary pressures which in turn could also signal the Federal Reserve to taper its stimulus earlier than expected.
Investors are looking ahead of the FOMC meeting minutes for June due on Wednesday. Investors are hoping to get clues on the Fed’s stance on monetary policy. It will also help them gauge the outcome of future interest rate decisions.
S&P 500 Pre-Market Movers
Among the best performers in the premarket were energy companies. Marathon Oil Corp gained 2.82% in its stock earnings. The company has recorded large gains for the first half of 2021. The company’s profits were up 107.65% YoY.
Occidental Petroleum Corp gained 2.36% in pre-market trading. The oil company declined 0.85% on Friday to $32.58. this was after advancing 5.08% on Thursday.
Pfizer Inc led the drags in the S&P 500 premarket trading. The pharmaceutical company lost 1% in its stock earnings. the company’s Covid-19 vaccine was termed to be less efficient to the Delta variant.