S&P 500 futures rose Monday, building on the index's all-time closing record set last week after a weak July jobs report cooled bets on a Federal Reserve rate hike. Growing doubts that the U.S. and Iran will reach a lasting resolution to their conflict kept oil prices higher and added caution to the session, even as Iran said it was closing in on a deal with Oman to reopen the Strait of Hormuz.
S&P 500 futures edged up 0.16% early Monday, while Nasdaq-100 futures added 0.46% and Dow Jones Industrial Average futures held near the flatline. The moves extend a run that carried the S&P 500 to an all-time closing record last week, when the index closed at 7,757.64, up 47.68 points, or 0.62%, on Friday.
Jobs report cools rate-hike bets
The rally traces back to Friday, when the July nonfarm payrolls report showed an unexpected contraction, raising hopes that the Federal Reserve will hold off on raising interest rates. Fed funds futures now price in a roughly 44% likelihood that the central bank raises rates at its September meeting, down from 67% a week earlier, according to CME's FedWatch tool. Investors this week will watch consumer and producer price index readings for further clues on inflation, though no major economic reports are due Monday.
Strait of Hormuz doubts add caution
Still, growing doubts that the U.S. and Iran will reach a lasting resolution to their conflict in the near term kept sentiment guarded. WTI crude oil rose more than 1% early Monday as Iran continued to resist direct negotiations with Washington despite talk of a deal to reopen the strait.
Iranian Foreign Minister Abbas Araghchi said Sunday there was no possibility of restarting negotiations as long as the U.S. continues what he called its violations of the June memorandum of understanding, according to Tasnim News Agency, a semi-official outlet linked to Iran's Revolutionary Guard Corps. President Trump told Axios on Sunday that the U.S. approach fell short of full negotiations and that it wants Iran to feel economic pressure.
Source: CNBC
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