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* Futures down: Dow 0.26%, S&P 0.23%, Nasdaq 0.45%
July 8 (Reuters) - U.S. stock futures fell on Monday, as investors scaled back bets of an aggressive interest rate cut by the Federal Reserve later this month following a solid June jobs report.
Hopes that the U.S. central bank would cut rates to counter any hit to economic growth from a prolonged U.S.-China trade dispute had helped Wall Street’s main indexes rebound from a slump in May and hit record highs last week.
Traders still heavily bet that the Fed would lower key lending rates later this month, but expectations of a 50 basis point cut have dropped to 1.8%, from about 20% a week ago, according to CME Group’s FedWatch program.
Investors will get an opportunity to look for cues on the near-term monetary policy outlook during Fed Chairman Jerome Powell’s semi-annual testimony to the U.S. Congress on July 10-11. Also on tap is the Fed’s June policy meeting minutes, scheduled for release on Wednesday.
At 7:01 a.m. ET, Dow e-minis were down 71 points, or 0.26%. S&P 500 e-minis were down 7 points, or 0.23% and Nasdaq 100 e-minis were down 35.25 points, or 0.45%.
Morgan Stanley’s decision to cut exposure to global equities due to misgivings about the ability of policy easing to offset weaker economic data also weighed on sentiment.
The attention is now expected to turn to the start of the second-quarter earnings season next week. Profits for S&P 500 companies are expected to dip 0.1% year-over-year, according to IBES Refinitiv data.
Among stocks, Apple Inc’s shares fell 1.6% premarket after Rosenblatt Securities downgraded to “sell” from “neutral”.
Boeing Co’s shares declined 1.5% after Saudi Arabian budget airline flyadeal said it would not proceed with a provisional $5.9 billion order for the planemaker’s grounded 737 MAX aircraft, instead opting for a fleet of Airbus A320 jets. (Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)
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