Futures slip ahead of inflation, factory activity data

October 1, 2021

(Reuters) – U.S. stock index futures fell on Friday with economically sensitive sectors leading declines ahead of key readings on inflation and industrial activity, while progress towards a bipartisan infrastructure package remained in focus.

Oil firms including Exxon Mobil and Chevron Corp slipped about 0.9% premarket, while big banks Morgan Stanley, JPMorgan Chase & Co, Citigroup, Bank of America and Goldman Sachs Group dropped 1% each.

Industrials Caterpillar Inc, Deere & Co and Nucor Corp also came under pressure after Democratic leaders of the U.S. House of Representatives delayed a planned vote on a $1 trillion bipartisan infrastructure bill on Thursday.

These stocks would benefit the most from government spending on infrastructure.

Wall Street ended sharply lower on Thursday and the S&P 500 posted its worst month since the onset of the global health crisis, following a tumultuous month and quarter wrecked by concerns over COVID-19, inflation fears and budget wrangling in Washington.

All eyes are now on consumer spending, inflation and factory activity data later in the day for signs of economic health and clues regarding the Federal Reserve’s timeline for tapering its asset purchases and hiking key interest rates.

President Joe Biden signed a measure to continue funding the government through Dec. 3, although congressional Democrats and Republicans continued brawling over raising the debt ceiling beyond $28.4 trillion to avert a U.S. credit default.

At 6:21 a.m. ET, Dow e-minis were down 163 points, or 0.48%, S&P 500 e-minis were down 17.25 points, or 0.4%, and Nasdaq 100 e-minis were down 48.75 points, or 0.33%.

The S&P 500 on Thursday closed below its 100-day moving average (DMA), a closely watched technical indicator, for the first time since November 2020. All the three major Wall Street indexes are trading below their 100-DMAs.

Mega-cap tech stocks and slipped before the opening bell.

The NYSE FANG+TM index, which houses some of these stocks, slipped 3.7% over the July to September period, breaking its five-quarter winning streak.

Merck & Co Inc jumped 4.7% after the drugmaker’s experimental oral drug for COVID-19, molnupiravir, reduced by around 50% the chance of hospitalization or death for patients at risk of severe disease in a study.

(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel)

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