U.S. stock futures fell Monday morning even after the S&P 500 closed at a record last week, its third straight weekly gain. Traders now assign lower odds to a Fed rate hike next month following softer retail sales and a mild inflation report, while the Fed's July meeting minutes land Wednesday.
Dow Jones Industrial Average futures were off 108 points, a 0.2% decline, as Wall Street opened the week on a softer note after the S&P 500 notched a record close last week. S&P 500 futures lost 0.17% and Nasdaq 100 futures shed 0.28%.
Futures diverge across contracts
Even so, other readings on the same benchmarks told a different story. E-Mini S&P 500 contracts rose 0.11% and E-Mini Nasdaq 100 contracts gained 0.49%, while the E-Mini Dow slid 0.18%.
Rate-cut odds fuel a tech rally
A strong second-quarter earnings season has lifted sentiment. According to the Wall Street Journal, weaker retail sales figures and a benign inflation report have together pulled down the probability traders assign to a Fed rate increase next month.
Rory McPherson, chief market strategist at Wren Sterling, tied the shift in interest rate expectations to recent tech gains. According to CNBC: "the shift in interest rate expectations which feeds into some of those tech names" helps explain the rally after a quiet July, McPherson told CNBC's Squawk Box Europe on Monday.
Fed minutes and retail earnings ahead
The calendar looks comparatively light this week, though the Fed publishes the record of its July policy deliberations on Wednesday. Home Depot reports Tuesday, Lowe's follows Wednesday, and Walmart and Target round out retail earnings later in the week. The August Empire State manufacturing index and the NAHB Housing Market Index for August are also due.
Elsewhere, Brent crude rose 0.68% to $89.12 a barrel as the Middle East conflict showed no signs of resolution, yet stocks have continued to climb despite the ongoing hostilities.
Overseas, Chinese equities finished the session up by more than 1% even as data pointed to a slowdown in the country's economic momentum last month, according to the Wall Street Journal. Tokyo's Nikkei index also advanced, and the U.S. 10-year Treasury yield stood at 4.689%.
Source: Quartz
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