By Pranav Kashyap and Twesha Dikshit
(Reuters) -Wall Street futures edged higher on Monday, as investors awaited earnings from corporate heavyweights and a delayed inflation report that could trigger fresh market moves later this week.
Markets were nursing bruises from last week’s turbulence, as fears of systemic credit stress in the banking sector unnerved traders globally. However, upbeat earnings from some regional U.S. banks allayed concerns, offering a brief reprieve from the volatility.
Earnings from Wall Street majors, including Tesla, Ford, GM, Netflix, Procter & Gamble, Coca-Cola, IBM and Intel, are also set to roll in this week, presenting a fresh stress test for the stock market.
Third-quarter earnings for S&P 500 companies were estimated to grow 9.3% over the year earlier, according to LSEG IBES data.
At 06:52 a.m., Dow E-minis were up 48 points, or 0.1%, S&P 500 E-minis were up 11.5 points, or 0.17%, and Nasdaq 100 E-minis were up 63 points, or 0.25%.
All three indexes closed higher on Friday and logged weekly gains.
The CBOE Volatility Index, Wall Street’s fear gauge, also rose to its highest level in nearly six months on Friday, after renewed U.S.-China trade tensions fueled a flight to safety.
U.S. President Donald Trump has floated the idea of lowering tariffs, if Beijing resumes key purchases such as soybeans. While Trump acknowledged that a proposed 100% tariff on Chinese goods would not be sustainable, he pinned the latest breakdown in talks on China’s tightening grip over rare earth exports.
Deutsche Bank analysts said Trump’s dialed down rhetoric “added to investor expectations that those 100% tariffs won’t come into force”.
Trump, however, vowed to keep “massive” tariffs on India if New Delhi did not cease purchasing Russian oil. The U.S. president also said he would raise tariffs on Colombia amid a feud where he has accused Bogota of complacency in the illicit drug trade.
DELAYED CPI
The U.S. government shutdown has stalled key economic data releases since October 1, but attention now turns to the consumer price report, a closely watched inflation gauge that is due on Friday, just ahead of the Federal Reserve’s policy meeting on October 28-29.
September’s core inflation is expected to hold steady at 3.1%.
“There’s still no sign of a compromise between Republicans and Democrats that would see the government re-open. In terms of the market implications, this is still affecting the flow of economic data, so we’re not getting regular releases,” Henry Allen, macro strategist at Deutsche Bank, said.
Meanwhile, the Fed has not pushed back against rate-cut expectations, and markets are pricing in a quarter-point easing this month, with another reduction likely in December.
In premarket trading, Boeing shares rose 1.3% after the planemaker won approval from the U.S. Federal Aviation Administration to raise 737 MAX production to 42 planes per month.
WeightWatchers climbed 14% after the company partnered with Amazon for weight-loss drug delivery.
(Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Shilpi Majumdar)
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