U.S. stock futures edged higher on Monday following last week’s gains driven by a weaker-than-expected jobs report, which renewed hopes of the Federal Reserve cutting interest rates soon.
Dow Jones Industrial Average futures climbed by 30 points, around 0.1%, while S&P 500 futures were up by 0.1% and Nasdaq-100 futures remained flat.
Last week saw gains in the Dow and Nasdaq of 1.1% and 1.4%, respectively, with the S&P 500 also rising by 0.5%. The positive momentum followed the release of fresh nonfarm payrolls data, which showed fewer-than-expected job additions in April and an uptick in unemployment. This fueled optimism among traders that the Federal Reserve might move to lower interest rates sooner rather than later.
Bill Adams, chief economist at Comerica Bank, noted, “It feels a little early to declare that the U.S. economy has made a soft landing since the Fed still is holding interest rates at restrictive levels. But the April jobs report helps clear a path to that destination.”
Meanwhile, Warren Buffett’s Berkshire Hathaway announced at its annual shareholder meeting on Saturday that it had reduced its stake in Apple by 13%. Despite praising Apple, Buffett’s move raises questions about the future prospects of the tech giant, particularly regarding its declining free cash flow and balance sheet cash.
Looking ahead, investors are keeping an eye on key earnings reports this week, including those from Disney on Tuesday and Uber on Wednesday. Market analysts anticipate that strong earnings performance could help offset concerns about margin pressure.
On the economic front, speeches from Richmond Fed President Tom Barkin and New York Fed President John Williams are scheduled for Monday.
In other news, Foxconn, the manufacturer of iPhones, saw its shares surge by almost 7% after reporting a significant year-on-year increase in April revenue. Meanwhile, the Japanese yen is expected to face resistance against the U.S. dollar at the 150 level, despite recent intervention attempts by Japanese authorities.
Private surveys also showed a slight slowdown in China’s services activity in April, while business activity in Hong Kong’s private sector expanded at a slower pace during the same period.
Additionally, Warren Buffett revealed that Berkshire Hathaway had completely divested its stake in Paramount, incurring losses due to the media company’s struggles with dividend cuts, earnings misses, and CEO exits.
