Oct 7 2024: U.S. stock futures slipped on Monday after a strong performance on Friday, driven by an upbeat jobs report. Investors are now focusing on key inflation data and upcoming corporate earnings reports to gauge the Federal Reserve’s next moves on interest rates.
1. U.S. Stock Futures Edge Lower
Following Friday’s rally, U.S. stock futures were down early Monday. At 03:28 ET (07:28 GMT), Dow futures dropped by 89 points (0.2%), S&P 500 futures fell by 13 points (0.2%), and Nasdaq 100 futures declined by 46 points (0.2%).
Friday’s employment report revealed robust job growth in September, boosting market optimism that the U.S. economy is stabilizing as it heads into the final quarter. While this reduced the chances of a large 50-basis point rate cut by the Federal Reserve, it did support the idea of a “soft landing,” where inflation is tamed without sparking a wider economic downturn.
The Dow Jones Industrial Average hit a record high on Friday, while the Nasdaq gained 1.2%, and the S&P 500 rose by 51 points (0.9%), marking a fourth consecutive positive week for the major indices.
2. Inflation Data and Earnings on the Horizon
Investors are now awaiting crucial economic data, particularly the September Consumer Price Index (CPI) report on Thursday, which is expected to show continued moderation in price pressures. This data, combined with last week’s strong jobs report, will shape expectations for the Fed’s interest rate decisions in the coming months.
Producer price inflation data, set to be released on Friday, is also forecast to show cooling inflationary pressures.
In addition to economic indicators, U.S. third-quarter earnings season kicks off this week, with major financial institutions like JPMorgan Chase, Wells Fargo, and BlackRock set to report on Friday. These results will test the stock market, which is trading near record highs.
3. Rio Tinto Confirms Interest in Arcadium Lithium Acquisition
Mining giant Rio Tinto has confirmed its interest in acquiring U.S.-based lithium producer Arcadium Lithium. The companies said the approach was “non-binding,” with further details to be shared later.
If the deal is finalized, Rio Tinto would become one of the largest lithium producers globally, a strategic move as demand for the metal grows amid the electric vehicle boom. Arcadium, with a market capitalization of approximately $3.3 billion, saw its shares soar by over 35% in after-hours trading following the announcement.
4. Activist Investor Starboard Value Takes $1 Billion Stake in Pfizer
Starboard Value has taken a $1 billion stake in pharmaceutical giant Pfizer, according to a Wall Street Journal report. The activist investor aims to shake up the company’s management following its post-COVID struggles. Pfizer, once a key player in the pandemic’s vaccine rollout, has faced revenue shortfalls and lowered forecasts for 2024.
Starboard is reportedly working with two former Pfizer executives, ex-CEO Ian Read and ex-CFO Frank D’Amelio, to assist in the overhaul. Pfizer’s shares, which have fallen below pre-pandemic levels, saw a slight rise in after-hours trading.
5. Oil Prices Volatile Amid Middle East Tensions
Oil prices fluctuated on Monday after significant gains last week due to rising geopolitical risks. Brent crude increased by 0.5% to $78.47 per barrel, while U.S. crude (WTI) rose by 0.8% to $74.94 per barrel.
Last week saw oil prices record their largest weekly gains in over a year, driven by escalating tensions in the Middle East. Israel has vowed to retaliate against Iran for launching missiles following the assassination of a Hezbollah leader, raising concerns over a potential wider regional conflict.
