Stock-index futures rise as investors assess the Senate’s sweeping bill on clean energy, healthcare and taxes, and await key inflation numbers for July.
U.S. stock-index futures were higher on Monday after the Senate passed a sweeping bill on clean energy and healthcare, and ahead of inflation numbers that will provide further clarity on the direction of the economy and whether the Federal Reserve’s inflation-fighting rate hikes are working.
Futures on the Dow Jones Industrial Average gained 82 points or 0.25%. S&P 500 futures and Nasdaq 100 futures advanced 0.29% and 0.4%, respectively. The yield on the benchmark 10-year Treasury note fell 4 basis points to about 2.7993%, while the yield on the 30-year Treasury bond was down 2 basis points to 3.0383%. Yields move inversely to prices.
Monday’s stock market gains follow a weekly rise for the S&P 500 and the Nasdaq Composite as a surprisingly strong monthly jobs report eased some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Fed.
The S&P 500 ended down 6.75, or 0.16%, at 4,145.19. The Dow Industrials rose 76.65, or 0.23%, to 32,803.47. The Nasdaq composite fell 63.03, or 0.5%, to 12,657.55.
The S&P 500 and Nasdaq finished the week modestly higher, while the Dow fell slightly over the period.
Some clean energy related shares including Tesla (TSLA) – Get Tesla Inc. Report gained on Monday after the Senate passed a $430 billion climate bill, dubbed the Inflation Reduction Act, which is expected to be passed by the House later this week. The Invesco Solar ETF (TAN) – Get Invesco Solar ETF Report was up 1.7% in early trading.
A new reading for the Consumer Price Index, slated for release Wednesday, will give investors more clarity on the central bank’s next move at its policy meeting in September.
Economists are expecting the annual pace of inflation to have moderated to 8.7% in July from 9.1% in June, which was the largest increase since 1981. But core CPI is expected to increase by 0.5% month-over-month, pushing the annual rate up to 6.1% from 5.9% in June, underlining the difficulty the Fed faces trying to get inflation back in line with its official 2% target.
Any indication that inflation is still not close to peaking could test the recent rally in U.S. stock markets. Investors will also get to hear from several Fed speakers, with policymakers under renewed pressure to deliver a third 75 basis point rate hike at their upcoming meeting in September.
Other economic reports due out this week include Producer Price Index figures for July, which will be released Thursday along with the weekly report on initial jobless claims, and the University of Michigan Consumer Sentiment Index, which will be published Friday.
On the corporate earnings front, Disney (DIS) – Get The Walt Disney Company Report is expected to release its quarterly results after the market close on Wednesday. Other names set to report this week include Take-Two (TTWO) – Get Take-Two Interactive Software Inc. Report, Palantir (PLTR) – Get Palantir Technologies Inc. Class A Report, Wynn Resorts (WYNN) – Get Wynn Resorts Limited Report, Six Flags (SIX) – Get Six Flags Entertainment Corporation Report and travel stocks Norwegian Cruise Line (NCLH) – Get Norwegian Cruise Line Holdings Ltd. Report and Spirit Airlines (SAVE) – Get Spirit Airlines Inc. Report.
Other stocks on the move Monday included CVS Health (CVS) – Get CVS Health Corporation Report and Signify Health (SGFY) – Get Signify Health Inc. Class A Report, after CVS said it is looking to buy Signify as the drugstore and insurance giant looks to expand in home-health services. Signify shares were up more than 17% in premarket trading.
Shares of United Parcel Service (UPS) – Get United Parcel Service Inc. Report were also higher after the company agreed to acquire Italy’s Bomi Group, as the transportation giant looks to bolster its medical-product-distribution business.
In other merger-Monday news, The Wall Street Journal reported that Pfizer (PFE) – Get Pfizer Inc. Report has agreed to buy Global Blood Therapeutics (GBT) – Get Global Blood Therapeutics Inc. Report or $5.4 billion in a deal that would give the big drugmaker a foothold in the treatment of sickle-cell disease. Shares of Global Blood Therapeutics were up more than 4% in premarket.
And Tesla shares were on the rise, gaining 2.5% in premarket trading on the back of the Senate’s Inflation Protection Act, which promises billions in spending on climate initiatives, including the extension of a tax incentive for electric vehicles.