U.S. Futures Edge Higher; FOMC Minutes Dominate

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imageStock Markets10 hours ago (Jul 07, 2021 12:18)

© Reuters.

By Peter Nurse   

Investing.com – U.S. stocks are seen edging higher at the open Wednesday, cautiously rebounding after the previous session’s losses ahead of the release of the keenly awaited minutes from the last Federal Reserve meeting.

At 7:05 AM ET (1105 GMT), the Dow Futures contract was up 30 points, or 0.1%, S&P 500 Futures traded 7 points, or 0.2%, while Nasdaq 100 Futures climbed 70 points, or 0.5%.

Stocks mainly retreated Tuesday, with the blue chip Dow Jones Industrial Average falling over 200 points, or 0.6%, and the broad-based S&P 500 ending down 0.2%, ending a seven-day winning run. The Nasdaq Composite outperformed, rising nearly 0.2% to a fresh all-time high.

Weighing on sentiment was the release of the ISM non-manufacturing index for June, which showed a slight cooling in the red-hot U.S. services sector, falling to 60.1 from 64.0 the previous month. Chinese ADRs, meanwhile, remain vulnerable to the drip feed of information pointing to a crackdown on U.S. listings.

Stocks have hit record highs in recent days, driven by healthy economic data. While an ISM reading above 60 would normally be seen as indicative of a strong economy, concerns are growing that the recovery is peaking while prices remain elevated due to supply chain disruptions and, in some places, labor costs.

With this in mind, investors will study the minutes of the latest FOMC meeting, at 2 PM ET (1800 GMT), for clues on the future direction of the Federal Reserve’s monetary policy, particularly regarding the tapering of its bond-buying program.

Ahead of that sees the release of the JOLTs job openings survey, at 10 AM ET, which is expected to show 9.388 million vacancies in May, higher than April’s 9.286 million. 

In corporate news, Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are likely to be in focus after the Pentagon announced it would cancel its decision to award a $10 billion Cloud computing contract. MIcrosoft was the original winner of the tender, but the work is now likely to be divided between the two tech giants.

Crude prices rebounded Wednesday after Tuesday’s volatile session, with initial sharp gains over the failure of a group of major producers to boost production quickly sold into over concerns the disagreement could bring an end to the group’s previous unity over production levels, potentially resulting in millions of additional barrels a day hitting the market.

Also of interest Wednesday, the American Petroleum Institute will release its weekly estimates of crude inventories after the closing bell, with the previous week’s report showing a draw of 8.1 million barrels.

At 7:05 AM ET, U.S. crude futures traded 1.6% higher at $74.53 a barrel, after settling 2.4% lower Tuesday, its sharpest loss in three weeks, while the Brent contract rose 1.5% to $75.63, after dropping 3.4% during the previous session.

Elsewhere, gold futures rose 0.8% to $1,807.65/oz, while EUR/USD traded flat at 1.1822.

U.S. Futures Edge Higher; FOMC Minutes Dominate

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