The futures linked to the DOW JONES fell 0.21% to 38,718 points, while those of the S&P 500 lost 0.13%, to 5,339 points. NASDAQ 100 futures lost a slight 0.05% to 18,988 points.
The major Wall Street indices are coming off a positive week even though they ended up closing lower on Friday. The S&P 500 hit a new intraday all-time high on Friday, although it closed 0.11% lower. The market index advanced 1.32% for the week as a whole. The tech-heavy Nasdaq Composite added 2.38% for the week despite falling 0.23% on Friday.
Meanwhile, the Dow Jones was down 0.22% on Friday but posted a modest 0.29% gain for the week.
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The differential behavior of the S&P 500 and the Nasdaq compared to the Dow Jones is largely explained by the NVIDIA factor. The semiconductor manufacturer rose 10% in the week and exceeded the market capitalization of 3 trillion dollars, already stepping on the heels of Microsoft as the most valuable company on the stock market.
It must be taken into account that today will be the first day in which NVIDIA shares are trading ‘cheaper’ after the Stock Split carried out last Friday after the close of the regular session.
The other major focus of attention in the business field will be directed to Apple. The iPhone maker kicks off its World Developers Conference this afternoon, where it is expected to make its latest software announcements. The great point of interest, the possible integration of ChatGPT into the company’s operating systems.
Shares of Southwest Airlines soared 7.0% after it was revealed that activist investor Elliott Investment Management has accumulated a position of almost $2 billion in the company.
Meanwhile, strong increases also for CrowdStrike, KKR & Co and GoDaddy after S&P Dow Jones Indices said that these companies will enter the S&P 500 starting June 24, replacing Robert Half, Comerica Inc and Illumina.
The CPI and the Fed, protagonists of the week
All eyes are focused this week on the Federal Reserve’s monetary policy meeting and the publication of the consumer price index (CPI) for May, which are especially key after Friday’s solid employment report seemed to distance hopes for rate cuts a little more.
In front of the CPI, economists surveyed by Dow Jones anticipate an increase of 3.4% compared to May of the previous year and 0.1% compared to April. That compares with increases of 3.4% and 0.3%, respectively, in the previous reading. The core CPI, which excludes volatile food and energy prices, is also expected to show an increase of 3.5% year-on-year and 0.3% month-on-month. Previously, it gained 3.6% and 0.3%, respectively.
As for the Fed, and once a rate movement has been almost completely ruled out at this meeting, interest will be in looking for clues about future meetings. According to the CME FedWatch tool, the probability of a cut in July is less than 9%, while for September it is only 45%, so the majority option already points to November.
Along with the monetary policy announcements, the Fed will release its new macroeconomic picture and its updated dot plot, in which committee members draw their expectations for medium-term rates.
“The main focus will be the updated dot chart,” ING analysts explain in a note. “Given that inflation has remained stable and the latest employment figures exceeded all expectations, we expect them to delay their rate cut projections to end up with two cuts in 2024 and four in 2025 instead of three and three,” believe the Dutch bank experts.
Data on the May producer price index, import and export prices, and the first estimate of consumer confidence from the University of Michigan will also be published this week.
While waiting for these references, in fixed income the yield of the ten-year benchmark bond rises three points, to 4.465%. On the two-year bond, the yield rises two points to 4.8909%.
In raw materials markets, oil prices remain unchanged: hopes of an increase in fuel demand this summer are largely neutralized by the strength of the dollar.
US West Texas futures advanced 0.12% to $75.61 per barrel, while European benchmark Brent rose 0.19% to $79.77.
The euro fell 0.63% against the dollar, leaving the exchange rate at 1.0734 dollars for each single currency.
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