Stocks end lower after a largely mixed session as traders eye earnings heavy week
Investing.com - Futures linked to the main averages on Wall Street tick up, ahead of a busy week filled with key economic indicators. A measure of U.S. services sector activity will be in the spotlight on Monday, while oil prices inch down after OPEC+ unveils plans for further crude production increases and spot gold declines as the U.S. dollar strengthens.
1. Futures edge higher
U.S. stock futures hovered mostly above the flatline following a long weekend on Wall Street.
By 03:01 ET (07:01 GMT), the Dow futures contract was broadly unchanged, S&P 500 futures had risen by 25 points, or 0.3%, and Nasdaq 100 futures had climbed by 276 points, or 0.9%.
The averages were closed on Friday in observance of the U.S. Independence Day holiday.
Markets are likely to turn their attention to the economic calendar this week. Last week, softer-than-anticipated June payrolls dented bets that the Federal Reserve could roll out imminent interest rate hikes. Speeches from Fed policymakers in the coming days could offer more insight into how officials at the central bank see rates evolving over the rest of the year.
2. U.S. services PMI
On Monday, a tracker of activity in the all-important U.S. services sector is set to be in focus.
The Institute for Supply Management’s non-manufacturing purchasing managers’ index for June is seen coming in at 54.2, down slightly from 54.5 in the prior month.
A reading above 50 denotes expansion.
The services sector makes up more than two-thirds of all U.S. growth, making it a crucial engine of the world’s biggest economy.
Last week, a separate ISM measure of manufacturing activity slowed by more than expected, cooling after a surge in May, as businesses gauged developments in the Iran war and an ongoing artificial intelligence boom.
3. OPEC+ agrees to raise oil output
Oil prices dropped on Monday, following a decision by a major group of crude-producing countries to increase its output targets from August.
By 03:26 ET, Brent crude futures, the global oil benchmark, had fallen by 0.4% to $71.86 a barrel, while U.S. West Texas Intermediate crude futures had fallen by 0.2% to $68.63 a barrel. WTI did not settle on Friday because of the closure of U.S. markets.
The two contracts were muted last week, as traders kept tabs on peace talks between the U.S. and Iran that could factor into the outlook for shipping through the critical Strait of Hormuz.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies, including Russia, announced that they would lift their production targets by 188,000 barrels per day from August. The move, which would be in addition to similar increases in June and July, combined with reports of recovering flows in the Strait of Hormuz to paint a picture of growing world oil supplies.
4. Spot gold dips
Elsewhere, spot gold prices traded lower, as the dollar clawed back some recent losses amid continued uncertainty over U.S. interest rates.
The yellow metal lost steam after rebounding from eight-month lows last week, while the greenback rose from near two-week lows. A stronger dollar can weigh on bullion by making it more expensive for overseas buyers.
Gold’s rally followed the weak U.S. nonfarm payrolls report, which spurred a scaling back in bets that the Fed will have enough headroom to raise interest rates in 2026.
Inflation and the labor market are the central bank’s two biggest considerations for adjusting rates. Sticky price gains and resilience in the labor market can give the central bank more impetus to hike rates.
Higher rates bode poorly for gold, given that they increase the opportunity cost of investing in non-yielding assets over government debt.
5. Foxconn’s second-quarter revenue surge
Foxconn, known formally as Hon Hai Precision Industry (TW:2317), clocked a sharp jump in its second-quarter revenue thanks to outsized demand for artificial intelligence products, although the company warned of geopolitical volatility.
Foxconn’s revenue in the April-June quarter spiked 39.8% year-on-year to T$2.513 trillion ($78.71 billion), the world’s largest contract electronics maker said in a statement on Sunday.
The print beat Reuters/LSEG estimates of T$2.372 trillion.
The company flagged strong demand for cloud and networking products fueled by burgeoning AI development, while its consumer electronics segment also logged solid growth.