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U.S. stock futures pointed lower Monday morning as investors continued to weigh rising bond yields, persistent inflation, and elevated oil prices following a week in which all three major indexes closed Friday more than 1% lower.
Dow Jones futures were down around 262 points, or 0.4%, while S&P 500 and Nasdaq futures were each down around 0.3%, according to Yahoo Finance. The Nasdaq led Friday's retreat, shedding 1.5%, as traders cut exposure to technology and AI-linked shares ahead of Nvidia's earnings report due later this week.
Bond markets remained under pressure after stronger-than-expected U.S. inflation data last week fueled concerns that the Federal Reserve may need to keep interest rates higher for longer, or could consider further rate increases. The U.S. 30-year Treasury yield climbed above 5.1%, its highest level since 2023.
Oil prices added to investor unease. WTI crude rose to a two-week high above $108 a barrel overnight, driven by concerns over potential disruptions in the Strait of Hormuz. Prices pulled back to just over $105 in recent trading after Iranian newswires reported some progress in negotiations with Washington. The semi-official Tasnim agency reported that Washington "has accepted the lifting of Iran's oil sanctions in its new text," with the U.S. proposing a temporary waiver by the Office of Foreign Assets Control until a final agreement with Tehran is secured. Pakistan is reportedly acting as an intermediary in the talks.
European markets held up better. Frankfurt's DAX gained 1% and London's FTSE 100 was up 0.5%, though France's CAC 40 slipped into negative territory.
Macroeconomic data due this week includes pending home sales on Tuesday, mortgage approvals and Federal Reserve minutes on Wednesday, and flash PMI data from the U.S., UK, Germany and the Eurozone on Thursday. Inflation figures from the UK and Canada are also expected.
Market analyst Kenny Polcari at Slatestone described the global PMI releases as "a real-time pulse check on the global economy," and raised the question of whether the data would show slowing growth or a drift "toward that ugly stagflation setup where growth weakens while inflation stays sticky." On the inflation readings from the UK and Canada, Polcari said they "will matter more than usual because investors are trying to determine if this inflation problem is global again and not just a US issue."
Despite the packed data calendar, Polcari put the week's central event bluntly: "But let's be honest… while all of that matters — next week is really about one thing: NVDA earnings – due out on Wednesday after the bell. Remember - NVDA is not just 'another stock'. It has become the heartbeat of the entire AI trade, the semis, the Nasdaq and frankly overall market sentiment as well."
