Stock index futures were mixed on Monday, while yields were largely flat, as politics takes center stage this week and traders await key U.S. inflation data expected to come on Friday.
Dow futures (INDU) were +0.2%, S&P 500 futures (SPX) were flat, and Nasdaq 100 futures (US100:IND) were -0.1%.
The 10-year Treasury yield (US10Y) was up by 1 basis point to 4.27%. The 2-year yield (US2Y) was unchanged at 4.75%. See how Treasury yields have done across the curve at the Seeking Alpha bond page.
U.S. stocks on Friday ended a largely uneventful trading session with small moves, as volatility that was expected ahead of a major options expiration event did not really emerge.
Investors will keep their eyes peeled for May’s personal consumption expenditure data, which is expected to come at the end of the week. The data comes amid an environment where the Federal Reserve is looking for further signs of slowdown and a fall in inflation to start easing monetary policy.
“Previewing Friday’s U.S. core PCE deflator, our economists’ believe it should increase 0.17%, which would have the effect of lowering the year-over-year rate by 12bps to 2.63%,” Deutsche Bank’s Jim Reid said.
Traders are also keeping a watch on chipmaker Nvidia (NVDA), after it became the largest company in the world last week.
Reid noted NVDA “opened over 3% higher on Thursday. However, from this peak it fell around 10% into Friday’s close. Is this a brief hiccup, or the start of some air being let out of the balloon?”
Politics will also take center stage this week, with the first round of French parliamentary elections expected to take place later this week, and the first televised debate between President Joe Biden and former President Donald Trump will be held on Thursday evening.
“This week has a lot of politics in it, and markets are rarely that good at pricing political risk. The U.S. presidential debate may make investors pay attention to political risk earlier than is normal in the U.S. political cycle,” UBS’ Paul Donovan said.
On the economic front, the June Dallas Fed manufacturing business index will land today during market hours.
San Francisco Fed’s President Mary Daly is also expected to speak today at 2 pm ET.
