US equity futures and Treasuries gained at the start of a data-heavy week that could prove pivotal for shaping expectations around Federal Reserve interest rate cuts later this year.
S&P 500 contracts rose 0.2% after the index ended Friday just shy of a record high. In premarket trading, Advanced Micro Devices Inc. fell 2.3% after the company and Nvidia Corp. agreed to pay 15% of their revenue from AI chip sales to China, payable to the US government, in exchange for export licenses. Nvidia retreated 1%.
The yield on 10-year Treasuries slipped two basis points to 4.27%, edging toward a three-month low of 4.18% touched last week. The dollar was little changed.
Tuesday’s release of July inflation data will give traders a chance to assess the impact of tariffs on consumer prices amid growing signs of a cooling labor market. Swaps are currently pricing in more than an 80% probability of a quarter-point rate cut in September, with core inflation expected to have risen 0.3% in July from June.
“That is a number that can probably be seen as acceptable for the Federal Reserve to proceed with a September cut,” noted ING Groep NV currency strategists Francesco Pesole and Frantisek Taborsky.
Among other economic data in the coming week, a Fed report is likely to show stagnant factory output as manufacturers contend with evolving tariff policy. Friday’s July retail figures are expected to show a solid gain as incentives helped fuel vehicle purchases and Amazon’s Prime Day sale drew in online shoppers.
In Europe, the benchmark equity index wiped out early gains as investors dialed back their optimism that a summit between US President Donald Trump and Russia’s Vladimir Putin would bring the war in Ukraine closer to a resolution. Wind power firm Orsted A/S fell as much as 29% in Denmark on the back of a $9.4 billion rights issue announcement.
A monthly survey by Bank of America Corp. showed that a record share of fund managers see US stocks as too expensive after the sharp rally since April lows. About 91% of participants indicated that American stocks are overvalued, the highest ever proportion in data going back to 2001.
While investor allocation to global equities climbed to the highest since February, a net 16% were still underweight the US, the poll showed.
Meanwhile, Bitcoin approached an all-time high, supported by strong demand from institutional investors and corporate buyers, which are helping to lift the entire cryptocurrency market.
In commodity markets, gold futures in New York declined as traders awaited clarification from the White House over its tariff policy. Lithium prices and stocks spiked after battery giant Contemporary Amperex Technology Co. Ltd. halted operations at a major mine in China.
Corporate Highlights:
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Shares in Danish Orsted A/S dropped as much as 24% after the company announced it will conduct a rights offering to raise as much as 60 billion Danish kroner ($9.4 billion).
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Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from Chinese AI chip sales to the US government in a deal to secure export licenses.
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Novartis AG succeeded in treating a form of autoimmune disease in late-stage studies, offering a boost for the Swiss drugmaker’s potential for treatments in the field.
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Barrick Mining Corp. slumped in pre-market trading after the Canadian miner posted a net charge of $1.04 billion related to the seizure of its vast Loulo-Gounkoto gold complex by Mali’s military junta.
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S4 Capital Plc, the advertising agency founded by Martin Sorrell, is in talks to combine with private equity-owned MSQ Partners.
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.2% as of 7:13 a.m. New York time
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Nasdaq 100 futures were little changed
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Futures on the Dow Jones Industrial Average rose 0.3%
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The Stoxx Europe 600 fell 0.1%
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The MSCI World Index was little changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1643
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The British pound was little changed at $1.3441
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The Japanese yen was little changed at 147.78 per dollar
Cryptocurrencies
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Bitcoin rose 2.2% to $120,956.55
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Ether rose 0.3% to $4,230.26
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.27%
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Germany’s 10-year yield was little changed at 2.69%
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Britain’s 10-year yield declined three basis points to 4.57%
Commodities
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West Texas Intermediate crude rose 0.2% to $63.99 a barrel
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Spot gold fell 1.2% to $3,355.61 an ounce
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