U.S. stock futures were trading in the red on Monday, with bond prices also weakening amid some tempering of recent enthusiasm over the potential for Federal Reserve interest rate cuts.
How are stocks trading?
-
Dow Jones Industrial Average futures
YM00,
-0.39%
fell 74 points, or 0.2%, to 36,229. -
S&P 500 futures
ES00,
-0.57%
dropped 13.75 points, or 0.3%, to 4,587. -
Nasdaq-100 futures
NQ00,
-0.73%
slipped 62.75 points, or 0.4%, to 15,961.
On Friday, the Dow
DJIA,
S&P 500
SPX
and Nasdaq Composite
COMP
logged a fifth, straight weekly gain. The Dow closed at its highest since Jan. 12, 2022, while the S&P 500 posted its highest finish since March 30, 2022.
What’s driving markets
Stocks have rallied as expectations for the resumption of Fed rate cuts next year have pushed Treasury yields lower.
Need to Know: Stock-market top could come as soon as this week, says award-winning technical strategist
But yields were creeping higher on Monday, with that of the 10-year note
BX:TMUBMUSD10Y
up 3 basis points to 4.246%. Yields tumbled Friday even after Federal Reserve Chairman Jerome Powell pushed back on rate-cut speculation, saying the central bank was prepared to hike again if needed.
Read: Dow near record high because traders are calling bluff on ‘higher-for-longer’ Fed
Earlier last week, encouraging inflation data and comments from Fed Gov. Christopher Waller helped turbo charge rate cut expectations. A fresh, weak reading on manufacturing from the Institute for Supply Management on Friday also gave those hopes a boost.
Investors will be looking ahead to important data this week to keep supporting the case for a rate cut, with November nonfarm payrolls numbers due at the end of the week.
“Investors expect further fall in U.S. jobs openings, less than 200,000 job additions last month with slightly higher pay on month-on-month basis. The softer the data, the better the chances of keeping the Fed hawks away from the market,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.
See: Stellar stock-market rally builds on ‘soft landing’ hopes. Why the economy isn’t out of the woods.
Fed rate cut hopes, alongside rising Middle East tensions triggered a fresh high for gold prices
GC00,
on Sunday, though the metal was paring back on Monday. Bitcoin
BTCUSD,
shot above $41,000 to a level not seen since May 2022.
Companies in focus
-
Shares of ride-hailing app Uber Technologies Inc.
UBER,
+1.72% ,
building-materials manufacturer Builders FirstSource Inc.
BLDR,
+3.86%
and electronics manufacturer Jabil Inc.
JBL,
+1.38%
were on the rise in premarket trade after S&P Dow Jones Indices on Friday said the companies would be cycled into the S&P 500 on Dec. 18. -
Alaska Air Group Inc.
ALK,
+5.08%
announced a deal Sunday to buy Hawaiian Airlines for about $1.9 billion. Under the terms of the deal, Alaska Air will pay $18 a share in cash, while taking on about $900 million in Hawaiian’s net debt. The price is equal to a 270% premium over Hawaiian’s closing price Friday at $4.86. Hawaiian shares
HA,
+8.24%
soared over 180% in premarket trade, while Alaska Air shares tumbled more than 12%.
Opinion: Uber is officially an adult company, in large part due to CEO Dara Khosrowshahi
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