On Monday, U.S. stock index futures showed little movement as Treasury yields climbed, fueled by increasing speculation that the Federal Reserve might postpone interest rate reductions within the year.
Last week's assertive statements from Federal Reserve officials, coupled with unexpectedly strong manufacturing and employment data, have showcased the U.S. economy's strength. This development has alleviated some of the urgency for the Fed to lower interest rates soon.
After assessing the situation on Friday, Wall Street's primary indexes ended the week in the red as investors adjusted their expectations regarding the Federal Reserve's rate cut timeline. According to the CME FedWatch Tool, the likelihood of a rate cut happening in June has decreased to 48% from the 58% anticipated at the beginning of last week.
Furthermore, market sentiment has shifted, now anticipating less than three rate cuts this year, a reduction from the previously forecasted three to four cuts, as per LSEG data.
The yield on 10-year Treasury notes saw a 4.45% increase, reaching its highest point since November, which in turn exerted pressure on the stock market. Investors are keenly awaiting remarks from Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari later today.
Attention is also directed towards the upcoming U.S. consumer price inflation (CPI) report for March, expected later this week. Analysts predict a rise in headline inflation to 3.4% year-over-year from February's 3.2%.
Additionally, the release of minutes from the Fed's latest meeting, which maintained its projection of three rate cuts this year, is highly anticipated.
The forthcoming first-quarter earnings season is set to intensify this week, with financial behemoths such as JPMorgan Chase & Co (JPM, Financial), Citigroup (C, Financial), and Wells Fargo & Co (WFC, Financial) poised to unveil their financial reports. Asset management giant BlackRock and Delta Air Lines are also on the schedule to disclose their quarterly results.
As of 5:38 a.m. ET, Dow e-minis dipped by 19 points, S&P 500 e-minis fell by 4.75 points, and Nasdaq 100 e-minis declined by 9.25 points.
Tesla (TSLA, Financial) saw a 3.4% increase in pre-market trading following CEO Elon Musk's announcement about the upcoming Robotaxi reveal on August 8.
Stocks related to cryptocurrency and blockchain, including Coinbase Global (COIN, Financial), Marathon Digital (MARA, Financial), and MicroStrategy (MSTR, Financial), experienced gains between 5.7% to 11.9%, tracking the uptick in bitcoin prices.
Shares of Taiwan Semiconductor Manufacturing Co (TSMC) in the U.S. market rose by 1.3% after the U.S. Commerce Department announced a $6.6 billion subsidy for the company's advanced semiconductor production facility in Phoenix, Arizona.
