Dow Futures Fall 540 Pts; Rivian Automotive Slumps on Block Trades By

© Reuters.

By Peter Nurse

-- U.S. stocks are seen opening lower Monday, continuing the recent selloff ahead of the release of the latest consumer inflation data which could see the Federal Reserve continuing its aggressive monetary policy tightening.

At 7:00 AM ET (1100 GMT), the Dow Futures contract was down 540 points, or 1.7%, S&P 500 Futures traded 80 points, or 2%, lower and Nasdaq 100 Futures dropped 310 points, or 2.4%.

The blue chip Dow Jones Industrial Average lost 0.2% last week, its sixth straight losing week, while the broad-based S&P 500 dropped 0.2% and the tech-heavy Nasdaq Composite lost 1.5%, the fifth straight lower week for these two indexes.

This followed the decision by the Federal Reserve to raise interest rates last week by 50 basis points and suggested that similar moves were likely at the upcoming meetings as it battles to curb soaring inflation.

April’s CPI data is due on Wednesday, and economists are forecasting an annual rate of 8.1%, a fall from 8.5% in March as gasoline costs hit record highs.

However, a stronger than expected reading could potentially underline the case for even more aggressive monetary policy tightening from the Fed, increasing fears of the economy tipping into a recession.

A flurry of speeches by Fed policymakers in the coming week, starting later Monday with Atlanta Fed President Raphael Bostic, will also be of interest for clues of Fed thinking.

In the corporate sector, Rivian Automotive (NASDAQ:RIVN) stock traded over 7% lower premarket after CNBC reported that Ford is looking to sell around 8 million of its shares in the electric vehicle maker, while JPMorgan (NYSE:JPM) is set to sell between 12 and 13 million shares on behalf of another unnamed shareholder.

The first-quarter earnings season is starting to slow down, but reports from the likes of data analytics firm Palantir Technologies (NYSE:PLTR) and vaccine-makers BioNTech (NASDAQ:BNTX) and Novavax (NASDAQ:NVAX) will be in focus.

Oil prices weakened Monday on concerns over global oil demand, especially given the ongoing COVID-19 lockdowns in China, the world’s largest importer of crude. 

Saudi Arabia, the world's top oil exporter, lowered crude prices for Asia and Europe for June on Sunday.

However, prices remain elevated with European Union governments meeting to work out how to ensure countries most dependent on Russian energy, like landlocked Hungary, Slovakia, and the Czech Republic can cope with the proposed ban on Russian oil. The proposal requires a unanimous vote among EU members.

Over the weekend, the Group of Seven major industrialized nations agreed to a similar ban on imports of Russian oil.

By 7:00 AM ET, U.S. crude futures traded 2.4% lower at $107.14 a barrel, while the Brent contract fell 2.2% to $109.97. Both benchmarks rose around 4% last week for a second week in a row.

Additionally, gold futures fell 1.3% to $1,858.60/oz, while EUR/USD traded 0.1% lower at 1.0538.

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