U.S. stock index futures tied to the Dow Jones Industrial Average rose slightly Monday as bank shares climbed, and investors looked ahead to a key inflation data release later in the week. Dow futures were up 93 points, or 0.4%. S&P 500 futures gained 0.2%. Nasdaq-100 futures were flat. Regional bank stocks rose broadly in the premarket, with the SPDR S&P Regional Banking ETF (KRE) climbing 2.6%. Shares of PacWest outperformed, surging 31%, after the bank cut its dividend. Big banks Citigroup, Wells Fargo, JPMorgan Chase and Morgan Stanley also rose. On the inflation front, investor attention this week turns to April’s consumer price index due out Wednesday, followed by the producer price index on Thursday. Both reports “could help analysts decipher the direction of the more stubborn crevices of the economy where inflation remains sticky,” said Quincy Krosby, chief global strategist at LPL Financial. Following last week’s rate decision from the Federal Reserve, traders are pricing in just a 9% chance for a hike at the central bank’s next policy meeting, according to CME’s FedWatch tool. “Financial markets are hoping that it continues to remain subdued, but only if inflation cooperates,” Krosby said. Stocks are coming off a volatile week that saw the Dow Jones Industrial Average and S&P 500 notch their worst weekly stretches since March. The losses came despite a late-week rally that saw volatile regional bank stocks jump off their lows. Over the weekend, billionaire investor Warren Buffett commented on a slew of topics, including the latest banking crisis that rocked Wall Street, at Berkshire Hathaway’s annual meeting in Omaha, Nebraska. The latest results from the conglomerate showed operating earnings increase 12% in the first quarter, while its cash hoard topped $130 billion. Despite recent fears, Buffett said deposits should be safe in the banking sector, while also noting that commercial real estate is beginning to experience the consequences of higher borrowing costs. Even with its more than 20% stake in Occidental Petroleum, Buffett also indicated that Berkshire has no plans to take over the oil giant. Asia-Pacific markets largely rose on Monday after Wall Street snapped a four-day losing streak Friday. In mainland China, the Shanghai Composite led gains in the region and gained 1.81% to close at 3,395 the highest level since July last year, while the Shenzhen Component closed 0.4% higher at 11,225.77. Japan’s Nikkei 225 fell 0.71% to end the day at 28,949.88 and the Topix lost 0.21% to finish at 2,071.21, with energy, financials and technology leading losses in Tokyo. Japan’s services sector saw a record pace of expansion in April, the au Jibun Bank Japan services purchasing managers’ index showed. Minutes from Japan’s March monetary policy meeting showed board members were concerned over inflation accelerating at a higher-than-expected pace. In Australia, the S&P/ASX 200 rose 0.79% to close at 7,277.3 as financials and miners led gains. South Korea’s Kospi rose 0.49%, closing at 2,513.21 and the Kosdaq was down 0.33% to end Monday at 842.28. Hong Kong’s Hang Seng index climbed 1.16% in its final hour of trade, powered by energy and healthcare stocks. Oil rose on Monday as easing U.S. recession fears shifted market focus to tightening supplies, offering support after crude prices registered three straight weekly declines for the first time since November. A healthy U.S. jobs report for April helped oil to climb by about 4% on Friday even though labour market strength could compel the Federal Reserve to keep interest rates higher for longer. Brent crude was up $1.36, or 1.8%, at $76.66 a barrel. U.S. West Texas Intermediate (WTI) crude gained $1.39, or 1.95%, to $72.73. Gold prices ticked up on Monday as the dollar eased and economic risks prevailed, while investors prepared for U.S. inflation data to gauge the Federal Reserve’s policy path. Spot gold was up 0.3% at $2,022.52 per ounce. U.S. gold futures rose 0.25% to $2,029.70. The dollar index dipped 0.1%, making bullion more attractive to overseas buyers.
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