Investing.com - Wall Street futures pointed to a lower open on Monday as markets continued to to look for clues on the timing of the next rate hike by the Federal Reserve (Fed) and prepared for a week replete with corporate earnings.
The blue-chip Dow futures lost 22 points, or 0.54%, by 7:54AM ET (11:54GMT), the S&P 500 futures fell 3 points, or 0.12%, while the tech-heavy Nasdaq 100 futures traded down 10 points, or 0.21%.
Market participants continued to gauge the stance on the Fed’s future return to policy normalization after the U.S. central bank’s chief Janet Yellen said on Friday that the Fed might be willing to temporarily run a “high pressure economy” in remarks that were taken by analysts to be it would be possible to allow inflation to run over the 2% target, in what could reduce pressure for a quick return to policy tightening.
Still, Boston Fed president Eric Rosengren, who preferred a 25 basis point hike in September, said on Sunday that he would be “comfortable” with an increase in November.
Most analysts think a move next month is unlikely since the policy announcement comes just six days before the U.S. presidential elections.
Markets too appear to think the possibility is off the table with just a 7.2% chance priced in. However, odds for a December hike stood at 73.6% on Monday, according to Investing.com’s Fed Rate Monitor Tool.
Later on Monday, Fed vice chairman Stanley Fischer could chime in with his own outlook in a speech to the Economic Club of New York.
With all eyes on the self-proclaimed “data-dependent” Fed, market participants will continue to evaluate the impact of economic data to adjust expectations for the next move.
In that regard, U.S. inflation data will be in the spotlight Tuesday, as investors attempt to gauge if the world's largest economy is strong enough to withstand an increase in borrowing costs before the end of the year.
Market analysts expect consumer prices for September to ease up 0.3%, while core inflation is forecast to increase 0.2%. On a yearly base, core CPI is projected to climb 2.3%.
On Monday’s light economic calendar, investors will focus on the strength of activity in the manufacturing sector.
At 8:30AM ET (12:30GMT), the NY Empire State manufacturing index for October will be released, followed by the national readings of manufacturing and industrial production for September at 9:15AM ET (13:15GMT).
Market participants will also be closely following a heavy week of corporate earnings with more than 80 components of the S&P 500 scheduled to report,
Shares of Bank of America Corporation (NYSE:BAC) were up more than 1% in pre-market trade Monday as the second largest U.S. bank by assets reported its first rise in profit in three quarters.
Hasbro Inc (NASDAQ:HAS) could also see upside movement in Monday’s session as the U.S. second largest toy maker beat consensus on both the top and bottom line.
IBM (NYSE:IBM) and Netflix Inc (NASDAQ:NFLX) were among notable companies scheduled to report after the closing bell.
Meanwhile, despite overnight losses, oil managed to turn around and move higher on Monday in early morning U.S. trade as a weaker dollar supported prices and market participants looked forward to the November 30 meeting of Organization of Petroleum Exporting Countries (OPEC) where members had promised to reach a deal on curbing output.
Russia was expected to be involved in an agreement with its oil minister Alexander Novak reportedly indicating on Monday that Moscow could be ready to act on a production freeze.
Iran also expressed hopes that a deal would be reached and defined the preliminary agreement among OPEC members as a “baby step in the right direction”.
Still, gains were limited over concerns that U.S. producers were increasing output thanks to higher prices. A report on Friday by oil services provider Baker Hughes showed U.S. drillers added four rigs in the week to Oct. 14. It was the 16th week in a row that oil drillers had gone without making cuts, indicating more production to come.
U.S. crude futures gained 0.22% to $50.46 by 7:48AM ET (11:48GMT), while Brent oil rose 0.44% to $52.18.