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After last week’s jobs report pointed to a still resilient U.S. economy, investors bumped up bets that the central bank would lift borrowing costs later in July by 25 basis.
All eyes are now on Wednesday’s inflation data that is expected to show consumer prices cooled on an annual basis in June, which could influence bets on another rate hike after the July meeting.
Market participants will also keep a close tab on commentary by a number of central bank policymakers who are expected to speak during the week.
The main U.S. stock indexes closed a choppy session slightly higher on Monday after Fed officials signaled the U.S. central bank was nearing the end of its monetary tightening cycle.
“Hopes have risen that we are approaching the end of the current monetary policy tightening cycle after several members of the Fed suggested interest rates are approaching their peak,” said Joshua Warner, market analyst at City Index.
The yield on two-year U.S. Treasury notes, which move in-line with short-term interest rate expectations, ticked further down from a 16-year high, and the inversion between the closely watched two- and 10-year part of the yield curve narrowed further ahead of the much awaited data.
In premarket trading, most megacap growth stocks such as Tesla (NASDAQ:TSLA), Amazon.com (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) edged up between 0.2% and 0.5%, recovering from Monday’s declines after Nasdaq Inc said it would rebalance its Nasdaq 100 index to address the benchmark’s “overconcentration.”
At 6:10 a.m. ET, Dow e-minis were up 24 points, or 0.07%, S&P 500 e-minis were up 5 points, or 0.11%, and Nasdaq 100 e-minis were up 25 points, or 0.16%.
Most big banks also edged up, with JPMorgan Chase (NYSE:JPM) rising 1.3% after Jefferies upgraded the stock to “buy” ahead of earnings later this week.
Zions Bancorp and Truist Financial (NYSE:TFC) shed over 1% in light trading after Jefferies cut its rating on the banks to “hold”.
