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US Index Futures Drop Ahead of FOMC Decision, Oil Prices Inch Up

Fernanda T
Latest News
June 10 2024 7:23AM

U.S. index futures are down in pre-market trading this Monday, marking the start of a week highlighted by the Federal Open Market Committee (FOMC) interest rate decision on Wednesday. According to the CME FedWatch tool, markets are now pricing in only one interest rate cut this year, expected in November.

As of 6:39 AM, Dow Jones futures (DOWI:DJI) fell 83 points, or 0.21%. S&P 500 futures declined 0.10%, and Nasdaq-100 futures gained 0.06%. The 10-year Treasury yield stood at 4.463%.

In the commodities market, West Texas Intermediate crude for July rose 0.12% to $75.62 per barrel. Brent crude for August increased by 0.15%, near $79.73 per barrel. Iron ore traded on the Dalian Exchange rose 0.72% to $115.83 per metric ton.

European markets are operating lower, reflecting investor reactions to the European Union (EU) Parliamentary election results and the unexpected call by French President Emmanuel Macron for new parliamentary elections. Early EU election results indicate that far-right populist parties may have a greater influence on European policy-making over the next five years.

Asian markets closed mixed amid holidays that kept Chinese and Hong Kong markets closed. In Tokyo, the Nikkei index advanced 0.92% to 39,038.16 points, driven by gains in the financial and electronic sectors, supported by strong U.S. labor market data that boosted Japanese government bond (JGB) yields and weakened the yen. Additionally, there was an upward revision in Japan’s Gross Domestic Product (GDP) for the quarter ending in March, resulting in an annualized contraction of 1.8%. South Korea’s Kospi index fell 0.79%, and Australia’s ASX 200 rose 0.49%.

On Friday, major U.S. indices fluctuated between gains and losses before closing slightly lower. The S&P 500 fell 0.11%, the Dow Jones declined 0.22%, and the Nasdaq lost 0.23%. The May jobs report showed an increase of 272,000 jobs, surpassing expectations of 185,000. However, the unemployment rate reached its highest level since January 2022, rising to 4.0% from 3.9% in April. Annual growth in average hourly earnings accelerated to 4.1%. Analysts had expected the unemployment rate to remain unchanged and had estimated around 185,000 jobs, compared to the originally reported addition of 175,000 jobs for the previous month. The indices posted positive weekly results, with the Nasdaq up 2.4% and the S&P 500 up 1.3%. The Dow recorded a more modest gain, rising 0.3%.

Scheduled to report quarterly earnings are FuelCell Energy (NASDAQ:FCEL), Yext (NYSE:YEXT), Skillsoft (NYSE:SKE), Calavo Growers (NASDAQ:CVGW), among others.