US stock futures creep higher with inflation, earnings on tap

Investing.com-- U.S. stock index futures rose in evening deals on Sunday after Wall Street bounced past hotter-than-expected payrolls data, with focus now turning towards an upcoming inflation reading for more cues on interest rates. 

Anticipation of the first-quarter earnings season- which begins this week- is also expected to keep Wall Street on tenterhooks.

Stronger-than-expected nonfarm payrolls data on Friday saw traders drastically scale back expectations that the Federal Reserve will cut interest rates by as soon as June- a notion that is expected to limit any major upside in Wall Street.

S&P 500 Futures rose 0.1% to 5,258.0 points, while Nasdaq 100 Futures rose 0.1% to 18,318.50 points by 19:14 ET (23:14 GMT). Dow Jones Futures rose 0.16% to 39,286.0 points.

Wall St strong despite payrolls shock, CPI next test 

Wall Street indexes ended higher on Friday despite the stronger-than-expected payrolls data, benefiting from some bargain hunting after trending lower for most of the week. U.S. stock benchmarks still clocked their first weekly loss in three weeks.

The S&P 500 rose 1.1% to finish at 5,204.34 points on Friday, while the NASDAQ Composite rose 1.2% to 16,248.52 points. The Dow Jones Industrial Average rose 0.8% to 38,904.04 points. All three indexes lost between 0.8% and 2.3% last week.

Focus is now squarely on consumer price index (CPI) data for March, due on Wednesday. While the reading is expected to show some cooling in inflation, it is still expected to remain well above the Federal Reserve’s 2% annual target. 

The reading also comes after repeated warnings from Fed officials that sticky inflation will delay interest rates early in 2024. 

The minutes of the Fed’s March meeting are due on Wednesday, and are also expected to provide more cues on potential rate cuts. 

But Friday’s inflation data and several hawkish comments from Fed officials saw traders largely price out expectations for a rate cut in June. Traders now see a roughly 51 % chance for a 25 basis point cut in June, according to the CME Fedwatch tool.

Q1 earnings begin, bank results on tap

Focus will also be on the first-quarter earnings season, to gauge whether major U.S. stocks can justify a recent run-up in valuations. Wall Street indexes were all trading about 10% higher so far in 2024, and were sitting close to record highs. 

Major U.S. lenders JPMorgan Chase&Co (NYSE:JPM), Citigroup Inc (NYSE:C), and Wells Fargo &Company (NYSE:WFC) will report earnings on Friday.

Delta Air Lines Inc (NYSE:DAL) and top asset manager BlackRock Inc (NYSE:BLK) will also provide quarterly updates during the week.