Jan 8 (Reuters) - Futures on the Dow fell on Monday and the other two major U.S. indexes were flat, pressured by uncertainty around interest-rate cuts and a tumble in airline stocks after the grounding of some Boeing jets.
Boeing (BA.N) nosedived 8.2% in premarket trading after the U.S. Federal Aviation Administration (FAA) ordered the temporary grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group (ALK.N) jet in midair on Friday.
The aircraft manufacturer could lose about $12.5 billion in value if losses hold through market open.
Alaska Air Group (ALK.N) slid 4.2% after the carrier canceled more than 200 flights following the FAA order, while other airlines like JetBlue Airways (JBLU.O) and United Airlines (UAL.O) lost more than 1% each.
"Boeing's reputation has been shattered after the incident last Friday involving one of its 737 MAX planes," said AJ Bell investment director Russ Mould.
"It is the latest in a string of problems for the company, which include the grounding of 737 MAX plans in 2019 after two crashes and subsequent delivery delays and production issues."
On Friday, the benchmark S&P 500 (.SPX) notched its worst week since late October as investors turned cautious and scaled back expectations on when the Federal Reserve could begin interest rate reductions.
Adding to the uncertainty was hotter-than-expected employment numbers and soft services sector data last week that painted contrasting pictures about the health of the world's biggest economy.
Money markets currently expect with 61% certainty that the central bank could deliver at least a 25-basis-point (bps) rate cut as early as March, down from over 85% in the final weeks of 2023, according to the CME FedWatch Tool.
Dallas Fed President Lorie Logan over the weekend warned that the U.S. central bank may need to resume raising its short-term policy rate to keep a recent decline in long-term bond yields from rekindling inflation.
Traders will parse remarks by Atlanta's Raphael Bostic, a Federal Open Market Committee (FOMC) voting member this year, due at 12:30 p.m. ET, for his perspective on monetary policy easing.
Investors were also awaiting two December inflation reports later in the week and commentary by a slew of policymakers that could offer clues on the Fed's monetary policy trajectory.
At 7:06 a.m. ET, Dow e-minis were down 156 points, or 0.41%, S&P 500 e-minis were down 2 points, or 0.04%, and Nasdaq 100 e-minis were up 5.5 points, or 0.03%.
Among others, JPMorgan Chase (JPM.N), Bank of America (BAC.N), Wells Fargo (WFC.N) and Citigroup (C.N) are expected to kick off the earnings season on Friday with hopes high for upbeat profits. The lenders were off between 0.1% and 0.6% on Monday.
Energy stocks including Occidental Petroleum (OXY.N), Callon Petroleum (CPE.N), Devon Energy (DVN.N), Marathon Oil (MRO.N) lost around 1% each, tracking a nearly 3% fall in crude prices.
Harpoon Therapeutics (HARP.O) more than doubled on a report that Merck & Co (MRK.N) was in advanced talks to buy the cancer drugmaker for around $700 million
Dell Technologies (DELL.N) added 2.3% after J.P. Morgan upgraded the computer maker to "overweight" from "neutral", while DoorDash (DASH.O) gained 3.2% after Jefferies upgraded the food delivery firm's stock to "buy" from "hold".
Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Devika Syamnath
