Dow Set to Open Down After Powell-Inspired Rally
U.S. stock futures pointed to small losses early Monday, with the market looking to take a breath after the rally inspired by Federal Reserve Chair Jerome Powell opening the door to interest-rate cuts.
Dow Jones Industrial Average futures were down 33 points, or 0.1%. S&P 500 futures were falling 0.1% and Nasdaq 100 futures were also down 0.1%.
The Dow hit a record high Friday after Powell said a rate cut may be warranted. Traders are pricing in an 87% chance that the Fed will cut its key interest rate by 25 basis points in September, up from 62% a month ago, according to the CME FedWatch tool.
“Powell suggested a gradual pace of easing would be appropriate,” wrote Nomura economist David Seif in a research note. “This appears consistent with our expectation for a quarterly pace of rate cuts beginning in September, as opposed to a larger 50bp cut or easing at consecutive meetings.”
The yield on the benchmark 10-year Treasury note stood at 4.271% early on Monday, broadly flat from the previous week.
The corporate highlight of the week is chip maker Nvidia’s earnings report on Wednesday. Its comments on demand for artificial-intelligence hardware will be eagerly watched after AI stocks were hit last week amid fears of a bubble.
Before then, furniture retailers’ stocks such as Wayfair and Williams-Sonoma will be in focus after President Donald Trump announced a Commerce Department investigation into tariffs on imported furniture. Keurig Dr Pepper has struck a deal to buy Peet’s Coffee owner JDE Peet’s for $18 billion, while planning to subsequently spin off its coffee brands into a separate public company.