Dow futures rise 45 pts; rebounding ahead of Fed, CPI data

  • Stock Market News
Dow futures rise 45 pts; rebounding ahead of Fed, CPI data
Credit: © Reuters.

By Peter Nurse -- U.S. stocks are seen opening marginally higher Monday, starting an important week that includes consumer inflation data and the final Federal Reserve policy-setting meeting of the year on a positive note.

At 07:00 ET (12:00 GMT), the Dow Futures contract was up 45 points, or 0.1%, S&P 500 Futures traded 10 points, or 0.3%, higher and Nasdaq 100 Futures climbed 35 points, or 0.3%.

The three major averages are seeing buyers early Monday after last week’s selling saw the blue chip Dow Jones Industrial Average drop 2.8%, its worst week since September. The broad-based S&P 500 fell 3.4% and the tech heavy Nasdaq Composite shed 4%.

The week’s main focus will be the two-day FOMC meeting , ending on Wednesday. 

Expectations for a half-point hike are already firmly baked in, with policy-makers having pointed to a slowing of the pace of increases after hikes totaling 375 basis points this year, including four successive rises of 75 basis points, in the fastest rate-hiking cycle since the 1980s.

That said, producer prices data, released late last week, pointed to inflation remaining sticky. This could mean interest rates ending up at a higher level than officials indicated was likely back in September, so focus may turn to signals for how high rates may ultimately raise in 2023.

Tuesday’s consumer price inflation data for November will also provide clues, with economists expecting the annual rate of inflation to slow to 7.3% from 7.7% the previous month.

In the corporate sector, Microsoft (NASDAQ: MSFT ) will be in the spotlight after the tech giant announced it will take a stake of 4% in the London Stock Exchange Group (LON: LSEG ) as part of a new strategic partnership.

Microsoft's investment comes in return for a massive commitment to upgrade LSE's cloud-based services, which will see the exchange group spend a minimum of £2.3 billion (£1=$1.2205) over 10 years on cloud services provided by Microsoft's Azure Purview and Azure Synapse businesses. 

Additionally, the Wall Street Journal reported that Amgen (NASDAQ: AMGN ) was in pole position to buy Horizon Therapeutics (NASDAQ: HZNP ), after French drugmaker Sanofi (EPA: SASY ) backed out of its plans to bid for the biotech.

Rivian Automotive (NASDAQ: RIVN ) said on Monday it is pausing its joint venture with Mercedes-Benz Vans as it tries to become cash flow positive in its U.S. operations.

This announcement comes just three months after the companies entered a partnership to make electric vans in Europe.

Crude oil prices fell Monday, resuming last week’s slump on worries about slowing global growth even with the Keystone pipeline between the U.S. and Canada remaining closed, threatening to tighten supply to the largest consumer of crude in the world.

Canada's TC Energy (NYSE: TRP ) has yet to determine the cause of the leak to its Keystone oil pipeline, and consequently it has no timeline as to when it would resume distributing 622,000 barrels a day of heavy Canadian crude to refineries in the U.S. Midwest and the Gulf Coast.

By 07:00 ET, U.S. crude futures traded 0.9% lower at $70.39 a barrel, while the Brent contract fell 1% to $75.34. 

Both contracts fell last week to their lowest levels since December 2021 on concerns that a possible global recession will hit oil demand.

Additionally, gold futures fell 0.3% to $1,805.85/oz, while EUR/USD traded 0.4% higher at 1.0568.

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