July 6 (Reuters) – Wall Street futures rose on Monday as chip stocks stabilized after recent weakness, while a fall in oil prices helped extend a rally that lifted the main U.S. indexes the previous week.
Oil prices remained under pressure after OPEC+ agreed to raise output targets and shipping through the Strait of Hormuz continued despite a lack of fresh developments in the fractious peace talks between Washington and Tehran. [O/R]
Brent crude futures fell 0.5% to $71.76 a barrel, hovering near four-month lows.
The Dow closed at a record high on Thursday during a holiday-shortened week, putting it within reach of 53,000 — a level it has never touched — with the Dow, the S&P 500 and the Nasdaq Composite gaining about 2% each.
The indexes advanced even as semiconductor stocks, among the market’s biggest drivers this year, lost momentum. Investors have taken comfort from recent strength in healthcare, industrials and financials, taking it as a sign that the rally may be broadening beyond the chip and AI trade.
Chip stocks stabilized in premarket trading on Monday, with memory-chip makers Western Digital, Seagate and Micron Technology rising 5.5%, 4.4% and 3.4%, respectively.
At 05:37 a.m. ET, Dow E-minis rose 37 points, or 0.07%, S&P 500 E-minis added 34 points, or 0.45%, and Nasdaq 100 E-minis gained 307.25 points, or 1.04%.
South Korean chipmaker SK Hynix is set to launch a U.S. listing on Monday to raise about $28 billion, according to regulatory filings, in another test of investor appetite for AI-linked companies.
U.S. Federal Reserve policy stays in focus as the second half of the year starts, with investors reassessing the interest-rate path. Rate-hike bets eased slightly on Thursday after a cooler-than-expected jobs report.
Traders now see a 24% chance of a 25-basis-point rate hike at the central bank’s July 29 meeting, down from about 30% a week earlier, according to CME’s FedWatch tool. For September, markets are pricing in about a 44% chance of one quarter-point hike, compared with 48.3% a week ago.
Hawkish bets had built after last month’s Federal Reserve meeting, the first under new Chair Kevin Warsh.
Minutes from that meeting are due on Wednesday and will be parsed for policymakers’ views on energy prices’ inflationary impact as well as any signs of division among Fed officials.
Second-quarter earnings season gathers pace later this month and will be another key test for markets. Delta Air Lines and PepsiCo are expected to report later this week.
Fed Governor Christopher Waller speaks in Rome later in the session, while New York Fed President John Williams is expected to give commentary on Thursday. The Fed chair is scheduled to testify before the House Financial Services Committee next week.
The ISM services survey later on Monday is expected to show only a slight easing to a still healthy 54.0, offering investors one of the few major data points in an otherwise light week.
(Reporting by Ragini Mathur in Bengaluru; Editing by Pooja Desai)
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