Stock futures drifted south on Monday, against backdrop of a weakening dollar and oil prices, as investors got ready to listen for rate-hike clues in a busy week of Federal Reserve speakers.
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The U.S. economy should be solid enough to merit an interest-rate increase this year, and the central bank won’t cave to political pressure to refrain from tightening during a presidential election year, said John Williams, president of the Federal Reserve Bank of San Francisco.
“It is just the market pricing in and taking the complacency out of the thought the Fed is not going to move, that June is live”.
At 9:37 a.m. ET the Dow Jones industrial average was down 16.84 points, or 0.1 percent, at 17,484.1, the S&P 500 was down 1.75 points, or 0.09 percent, at 2,050.57 and the Nasdaq Composite was up 8.23 points, or 0.17 percent, at 4,777.79.
As recently as Monday, investors were almost certain the central bank would hold off on an interest rate hike in June, as Fed funds futures rates showed only a 4-percent chance according to CME Group’s FedWatch tool.
“We will see more of the rotation”, said Scott Keifer, global investment specialist at JP Morgan Private Bank in Orange County, California.
Apple’s 1.3 percent rise provided the biggest boost to the Nasdaq.
“I do worry that keeping rates too low for too long could feed into future financial instability even if it doesn’t look like we’re in that situation today”, Mr Bullard, a voting member of the Fed’s policy-setting committee, told reporters.
Stocks to watch: Shares of Monsanto Co.(MON) rose after German pharmaceutical and chemicals giant Bayer AG (BAYN.XE) said it will acquire the USA agrochemicals company for $62 billion (http://www.marketwatch.com/story/bayer-makes-62- billion-bid-to-take-over-monsanto-2016-05-23). Despite gains, the Dow ended its fourth consecutive week in the red.
The metal found some support as the dollar fell versus the yen on Monday, dragged lower by sliding Tokyo stocks and data showing Japan logged a much larger-than-expected trade surplus in April. At 6:30 p.m. Eastern, Philadelphia Fed President Patrick Harker will speak on the economic outlook.
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Tribune Publishing fell 12.7 percent to $12.42 after it rejected Gannett’s latest takeover offer. Williams Companies dropped 3 per cent. The pan-European Stoxx 600 index added 1.2 percent.
