Futures dip as oil rally fuels inflation worries By Reuters

© Reuters. FILE PHOTO: A road signal for Wall Road is seen exterior the New York Inventory Trade (NYSE) in New York Metropolis, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

By Shreyashi Sanyal

(Reuters) – U.S. inventory index futures slipped on Monday as surging commodity costs added to inflation worries, which might cloud the earnings season set to start out with Wall Road banks later this week.

Rising uncooked materials prices, labor shortages and different provide chain bottlenecks have raised issues of elevated costs denting company revenue.

U.S. oil rose almost 3% and touched a seven-year excessive as an power disaster gripping the main economies confirmed no signal of easing.

However it lifted shares of Chevron Corp (NYSE:), Exxon Mobil Corp (NYSE:) and APA Corp between 1.2% and three% in premarket buying and selling.

Mega-caps Apple Inc (NASDAQ:), Microsoft Corp (NASDAQ:) and Inc (NASDAQ:) fell between 0.6% and 0.8%.

“There are undoubtedly important dangers to progress borne out of the current rise in costs, with surging costs bringing the potential for sharp will increase to each power and meals bills,” Joshua Mahony, senior market analyst at IG wrote in a shopper notice.

“Inflation appears like it is going to be right here for a while.”

At 7:01 a.m. ET, have been down 117 factors, or 0.34%, have been down 21.5 factors, or 0.49%, and have been down 107.25 factors, or 0.72%.

Earnings season will kick off this week, with JPMorgan Chase & Co (NYSE:) reporting on Wednesday, adopted by Financial institution of America Corp (NYSE:), Morgan Stanley (NYSE:) and Citigroup Inc (NYSE:) on Thursday and Goldman Sachs Group Inc (NYSE:) on Friday.

Analysts see a 29.6% year-over-year improve in revenue for firms within the third quarter, in keeping with IBES knowledge from Refinitiv as of Friday, down from 96.3% progress within the second quarter.

All of Wall Road’s fundamental indexes had ended the final week with positive aspects, however buyers nonetheless count on the Federal Reserve to start tapering asset purchases later this 12 months.

After knowledge final week confirmed weaker jobs progress than anticipated in September, buyers are actually trying towards inflation and retail gross sales numbers this week, in addition to minutes of the Fed’s final assembly that would affirm {that a} November tapering was mentioned.

Southwest Airways (NYSE:) Co slipped 1.9% on report that it canceled a minimum of 30% of its scheduled flights on Sunday.

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