Dow Futures Fall 30 Points; Twitter, CPI and Bank Earnings in Focus By

© Reuters.

By Peter Nurse    

-- U.S. stocks are seen opening lower Monday, at the start of a holiday-shortened week that sees the new earnings season get underway and the release of key inflation data.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 30 points, or 0.1%, S&P 500 Futures traded 15 points, or 0.3%, lower and Nasdaq 100 Futures dropped 110 points, or 0.8%.

The main Wall Street indices suffered losses last week, with the tech-heavy Nasdaq Composite leading the way, falling 3.9%, weighed by soaring U.S. Treasury yields.

The benchmark 10-year U.S. Treasury yield traded at a yield of 2.75% on Monday, just off its highest level since March 2019, as investors positioned for the Federal Reserve to aggressively lift interest rates throughout the year to combat rampant inflation.

February's consumer price inflation reading of 7.9% was the largest annual increase in 40 years, and soaring commodity prices on the back of the Ukraine war mean March’s reading on Tuesday is expected to show that CPI climbed higher still, by an annualized 8.5%.

A strong inflation reading would likely add to investor concerns that tighter monetary policy could act as a drag on the economy.

A number of Fed policy makers are scheduled to speak during a week cut short by Friday’s Easter holiday, including Michelle Bowman, Christopher Waller, Raphael Bostic and Charles Evans later Monday. Their comments will be studied carefully for clues over the pace of future Fed tightening.

Also of interest this week is the start of the first quarterly earnings season, with the big U.S. banks first up. JPMorgan (NYSE:JPM) will report before the bell on Wednesday, while Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) follow on Thursday.

In corporate news, Twitter (NYSE:TWTR) will be in the spotlight Monday after billionaire investor Elon Musk decided against taking a seat on the social media giant’s board despite disclosing a 9.2% stake last week.

Oil prices fell Monday, continuing recent weakness as China’s lockdowns continue as its Covid outbreak worsens, weighing on demand from the world’s largest crude importer.

Shanghai reported over 26,000 new cases on Sunday, a new record, illustrating the difficulty the country has had stopping the spread of the highly infectious omicron variant despite lockdowns and repeated mass testing.

Additionally, European Union officials are set to hold talks with OPEC representatives in Vienna later Monday, hoping to persuade the cartel to increase output as the EU considers potential sanctions on Russian oil.

By 7 AM ET, U.S. crude futures traded 3.4% lower at $94.91 a barrel, while the Brent contract fell 3% to $99.72 a barrel. Both benchmarks dropped over 1% last week, the second consecutive losing week.

Additionally, gold futures rose 0.5% to $1,955.70/oz, while EUR/USD traded 0.3% higher at 1.0913.

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