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U.S. equity futures edged lower Monday, paired with a pullback in Treasury bond yields, as investors looked to a busy week on Wall Street that could test the markets solid July start.
Stocks ended higher last week, with record closing levels again for the S&P 500 and the Nasdaq Composite, as big tech stocks got a boost from softer Treasury yields tied to a mixed June jobs report.
The Labor Department said 206,000 new hires were added last month, but clipped around 111,000 from prior month forecasts, suggesting a slower pace of demand heading into the summer.
Wage growth was also pegged at 3.9%, the slowest in three years, while the unemployment rate ticked modestly higher, to 4.1%.
Related: June jobs report bolsters bets on an autumn Fed interest rate cut
The data sets up an interesting week for markets as traders look for clarity on their bets that the Federal Reserve will see easing inflation pressures, as well as a slowing economy, and begin the first of its long-awaited rate cuts in mid-September.
Fed Chairman Jerome Powell will begin the first of two appearances on Capitol Hill this week with testimony to the Senate Banking Committee
Kevin Dietsch/Getty Images
Fed Chairman Jerome Powell could offer some clues in that respect when he speaks to the Senate Banking Committee and the House Financial Services Committee as part of his semi-annual testimony to Congress, which begins Tuesday.
The Commerce Department will also publish its estimate of June inflation Thursday, with analysts expecting the headline rate to ease to an annual rate of 3.1%.
The Treasury will also conduct benchmark auctions of 10-year notes and 30-year bonds this week, starting on Wednesday, with investors focused on the level of foreign demand for the record-sized sales.
Benchmark 10-year Treasury note yields were pegged at 4.314% heading into the start of the New York trading session, with 2-year notes trading at 4.637%.
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On Wall Street, investors will look to the start of the second quarter earnings season this week with updates from PepsiCo (PEP) on Thursday and JPMorgan (JPM) , Wells Fargo (WFC) and Citigroup (C) the following day.
LSEG data suggests collective second quarter profits for the S&P 500 are expected to rise 10.6% from last year to $495.2 billion, with information technology and communication services stocks contributing around 30.6% of the overall tally.
Heading into the start of the trading day, the S&P 500 is called around 5 points lower, with the Dow Jones Industrial Average priced for a 9 point decline. The tech-focused Nasdaq is called 14 points lower.
Boeing (BA) shares were a notable early mover, rising 0.5% to $185.80 each, after the planemaker agreed to a deal with the U.S. Department of Justice to plead guilty to a fraud and conspiracy charge, while paying a $243.6 million fine, tied to fatal 737 MAX crashes in 2018 and 2019.
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In overseas markets, France’s CAC-40 was marked 0.4% higher, with a similar gain for the regional Stoxx 600 benchmark, following Sunday’s parliamentary elections that saw a center-left coalition, which includes socialist lawmakers, win the largest number of seats.
The win not only prevents the far right National Rally party from assuming power, but also leaves President Emmanuel Macron in the role of power broker as he looks to build a coalition government from the widely disparate results.
Overnight in Asia, Japan’s Nikkei 225 slipped 0.32% lower into the close of trading as the yen edged higher, to 161.02 against the U.S. dollar, while the region-wide MSCI ex-Japan benchmark fell 0.08%.
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