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Manufacturing data due after opening bell
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Energy stocks gain as oil prices surge
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Tesla falls after modest quarter-on-quarter sales growth
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Futures mixed: Dow up 0.39%, S&P down 0.04%, Nasdaq down 0.61%
(Updates prices, adds comment)
By Ankika Biswas and Amruta Khandekar
April 3 (Reuters) - Futures tracking the S&P 500 and the
Nasdaq fell on Monday as a surge in oil prices renewed worries
of persistent inflationary pressures, bolstering bets that the
U.S. Federal Reserve will deliver another interest rate hike at
its next meeting.
Saudi Arabia and other OPEC+ oil producers announced further
oil output cuts of around 1.16 million barrels per day,
threatening an immediate rise in prices.
This comes just days after data showing cooling inflation
fueled hopes that the Fed could soon end its aggressive monetary
tightening.
As oil prices jumped, Dow Jones index constituent Chevron
Corp rose 3.8% in premarket trade, while shares of other
energy firms such as Exxon Mobil Corp and Occidental
Petroleum Corp were also up between 3% and 5%. "We could see inflation bottom out a little bit higher than
anticipated, which may mean that the Fed continues their rate
hiking a lot longer and further than many currently expect,"
said Paul Nolte, senior wealth adviser and market strategist at
Murphy & Sylvest.
An uptick in U.S. Treasury yields pushed major technology
stocks and other growth shares such as Apple Inc ,
Amazon.com Inc , Microsoft Corp and Alphabet
Inc down between 0.4% and 1%.
Traders' bets were largely tilted towards a 25-basis point
rate hike in May, with odds of a pause at 39.8%, according to
CME Group's Fedwatch tool.
Among other major stocks, Tesla Inc fell 2.1% after
the electric-vehicle maker posted record quarterly vehicle
deliveries, but quarter-on-quarter sales growth was modest
despite price cuts.
At 7:01 a.m. ET, Dow e-minis were up 131 points, or
0.39%, S&P 500 e-minis were down 1.75 points, or 0.04%,
and Nasdaq 100 e-minis were down 81 points, or 0.61%.
U.S. stocks have weathered turbulence in the global banking
sector to notch gains in the first quarter, with the S&P 500 jumping 7% and bouncing back from a near 20% drop in
2022. The tech-heavy Nasdaq recorded its strongest
first-quarter jump of 17% since mid-2020.
"We've seen the tech sector rally so hard and so far above
everything else that we do expect some profit taking during the
month of April," Nolte said.
Investors will closely monitor S&P Global and ISM
manufacturing PMI data for March on Monday, with the latter
expected to show manufacturing activity weakened in March.
The first-quarter earnings season is also around the corner,
with companies expected to start reporting quarterly results in
the next few weeks.
Remarks by Fed Board Governor Lisa Cook on economic outlook
and monetary policy are also expected later on Monday.
Among other stocks, shares of American Airlines Group Inc and Delta Air Lines Inc fell about 1% each
premarket on surging crude prices.
McDonald's Corp edged 0.7% higher after a report
said the burger chain is temporarily closing its U.S. offices
this week and preparing to inform corporate employees about
layoffs.
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru;
Editing by Shounak Dasgupta)
