© Reuters
Investing.com — U.S. stock futures edged higher Monday at the start of the last full trading week before the Christmas holidays, continuing the recent positive tone driven by expectations for Federal Reserve rate cuts next year.
By 06:50 ET (11:50 GMT), the contract was up 22 points, or 0.1%, traded 2 points, or 0.1%, higher, while dropped 15 points, or 0.1%.
The main Wall Street indices all posted gains last week, their seventh-consecutive positive week, with the blue chip recorded a new intraday all-time high.
Fed policymakers in focus
This rally has been largely driven by expectations that the Federal Reserve is done raising interest rates and will likely pivot to cuts next year, hopefully allowing the U.S. economy to recover strongly in 2024.
That said, this positive tone has been somewhat tempered by comments from New York Fed President late last week, who stated that policymakers were not “really talking about” interest rate cuts “right now.”
The economic data slate is largely empty Monday, and investors are likely to focus on comments from Chicago Fed President later in the session, and on Tuesday, for further clues over the likely path of future Fed monetary policy.
The week’s main release will be the , the Federal Reserve’s favorite gauge of inflation, on Friday, which is likely to show easing consumer price pressures.
The news out of Europe was less impressive earlier Monday, as unexpectedly weakened in December, according to data from the Ifo institute.
The Ifo institute said its business climate index stood at 86.4 versus the 87.8 expected, following a revised reading of 87.2 in November.
U.S. Steel gains Japanese admirer
In corporate news, United States Steel Corporation (NYSE:) stock soared in premarket trading after Nippon Steel (TYO:) said it would buy its U.S. rival in a deal worth $14.9 billion including debt, months after the steelmaker put itself up for sale.
The Japanese company will pay $55 per share in an all-cash transaction, a 40% premium to U.S. Steel’s Friday closing stock price.
Southwest Airlines (NYSE:) has agreed to a record-setting $140 million civil penalty over the December 2022 holiday meltdown that led to 16,900 flight cancellations and stranded 2 million passengers.
Oil rises after Russia details export cuts
Oil prices rose Monday, supported by lower exports from Russia and amid growing concerns of oil supply disruption through the Red Sea.
By 06:50 ET, the futures traded 1% higher at $72.50 a barrel, while the contract climbed 1.1% to $77.37 a barrel.
Russia said on Sunday it would deepen oil export cuts in December by around 50,000 barrels per day, as the world’s biggest exporters attempt to support global oil prices.
Additionally, concerns are growing over the potential for disruption to global supplies as a number of shipping firms said over the weekend that they would avoid the Suez Canal given the increase in assaults on commercial vessels in the Red Seas by Houthi militants in Yemen.
Trading has been volatile, though, in the wake of weak business morale data from Germany, the largest economy in the eurozone, with energy-intensive industries “having a particularly tough time.”
