U.S. Futures Just Lower; ISM Services Data in Focus

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U.S. Futures Just Lower; ISM Services Data in Focus
Credit: © Reuters.

By Peter Nurse   

Investing.com - U.S. stocks are seen opening marginally lower Tuesday, starting the new holiday-shortened week on a cautious note as oil prices rise after a group of top producers failed to agree on production levels.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 30 points, or 0.1%, S&P 500 Futures traded 3 points, or 0.1%, while Nasdaq 100 Futures climbed 7 points, or 0.1%.

Crude prices rose to their highest levels in nearly seven years Tuesday the day after talks between the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, broke down without agreement on a deal to boost production.

This lack of new output threatened to tighten the demand/supply balance as economies reopen around the globe, pushing prices higher and adding to near-term inflationary pressures that threaten to undermine the global economic recovery.

At 7 AM ET, U.S. crude futures traded 1.8% higher at $76.50 a barrel, reaching its highest level since November 2014, while the Brent contract rose 0.3% to $77.40, climbing to its highest point since late 2018.

Still, stock market losses are likely to be limited, with the main indices near record levels, helped by a successful vaccination program, healthy economic data and strong corporate earnings underpinned by massive levels of monetary and fiscal stimulus.

Wall Street was closed on Monday after a long weekend to celebrate Independence Day, but Friday’s June jobs report , where 850,000 jobs were created, added to the underlying positive tone.

The economic data slate Tuesday centers around the release of the ISM index of service industry activity . It is expected to show continued strong growth after hitting a record high in May, but could also underline ongoing labor market constraints.

In Europe earlier Tuesday, Eurozone monthly retail sales 4.6% on the month in May, more than expected, driven mostly by purchases of non-food products and car fuel, while investor sentiment in Germany dropped in July, but remained at a very high level. A greater source of concern may be the surprise 3% drop in German factory orders in May, given the importance of the sector for the Eurozone economy.

In corporate news, Didi Global (NYSE: DIDI ) stock slumped over 20% premarket and Kanzhun (NASDAQ: BZ ) stock fell 10%, both hit by Chinese authorities clamping down on their business practices.

Additionally, crude stocks benefited from the higher oil prices, with Exxon Mobil (NYSE: XOM ) stock up 0.9%, Chevron (NYSE: CVX ) stock rose 0.9% and Marathon Oil (NYSE: MRO ) stock up 1.8%.

Elsewhere, gold futures rose 1.4% to $1,807.65/oz, while EUR/USD traded 0.2% lower at 1.1841.

 

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