Wall St set to kick off week higher; U.S. inflation in focus By Reuters

By Bansari Mayur Kamdar and Legal foreign exchange trading platformJohann M Cherian

(Reuters) -Wall Street was set for a higher open on Monday following a choppy week, with investors looking ahead to a highly awaited U.S. inflation report due later in the week that could test the market's sharp recovery this year.

The main stock indexes ended the week lower on Friday with some investors taking profits after months of gains due to worries over economic data, mixed earnings and rising Treasury yields.

U.S. stocks have sharply rallied in 2023, with the benchmark clocking 16.6% gains year to date, fueled by optimism around artificial intelligence and hopes of a soft landing for the world's largest economy.

Both Bank of America (NYSE:) and JPMorgan (NYSE:) last week scrapped their forecasts for a U.S. recession.

The U.S. consumer price data on Thursday could offer cues to the Federal Reserve's monetary policy path, after an employment report on Friday re-ignited fears that the central bank could keep rates higher for longer.

"This month there is more than usual focus on the economic data coming out as the Fed will have more time to digest and synthesize the data," said Peter Andersen, founder of Andersen Capital Management.

"My hypothesis is the Fed's last hike was at its last meeting, that the economic data between now and the next Federal Reserve meeting in September will show consistent success in taming inflation."

New York Fed President John Williams, a voting member this year, said he expects interest rates could begin to come down in early 2024, as per a New York Times report.

Investors will also parse comments from Fed Board Governor Michelle Bowman, expected later in the day, after she said on Saturday the Fed will likely need to raise interest rates further to bring down inflation.

At 08:25 a.m. ET, were up 39 points, or 0.11%, were up 8 points, or 0.18%, and were up 44.25 points, or 0.29%.

Rising yields on U.S. Treasuries, that often dull the appeal for stocks, also remained in focus for investors, with the yield on the 10-year note creeping higher ahead of the Treasury Department's bumper $103 billion refunding.

Megacap growth and technology stocks Amazon.com (NASDAQ:) and Nvidia (NASDAQ:) added 0.6% each, in premarket trading, while Apple (NASDAQ:), the world's most valuable firm, inched 0.2% higher after sharp losses in the previous session following a gloomy iPhone sales report.

Overall, second-quarter earnings have been better-than-expected so far, with 79.1% of the 422 S&P 500 companies that have reported as of Friday beating analysts' estimates, according to Refinitiv data.

Class B shares of Berkshire Hathaway (NYSE:) gained 1.3% in trading before the bell after the Warren Buffett-led conglomerate posted its highest-ever quarterly operating profit.

(NYSE:) fell 7.7% after the meat packer disappointed Wall Street expectations for third-quarter revenue, as customers scaled back on meat purchases.

Yellow Corp, a nearly 100-year-old U.S. trucking firm, filed for Chapter 11 bankruptcy protection on Sunday, dragging its shares 42.6% lower.

U.S.-listed shares of BioNTech shed 5.0% after the COIVD-19 vaccine maker cut its drug development budget for this year.

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