Stock futures were little changed Monday as investors look to push equities back to record-high levels now that the Federal Reserve indicated that rate cuts are forthcoming. Futures tied to the S&P 500 climbed 0.1%, while Nasdaq-100 futures were flat. Dow Jones Industrial Average futures rose 44 points. Stocks are coming off of a strong week that was highlighted by comments from Fed Chair Jerome Powell that interest rates cuts are on the horizon. Wall Street has been anxiously awaiting a rate cut, especially in light of some worrying economic data that sparked a sell-off at the beginning of August and worried investors that elevated borrowing costs could damage the U.S. economy. But equities have since rebounded and are now hovering near all-time highs. The benchmark S&P 500′s close on Friday put the broad market index less than 1% away from its record high set in mid July. The rebound has broadened out to the wider market, with the small cap Russell 2000 adding 3% following Powell’s comments. ″[Powell’s comments] keeps a tailwind at the market’s back into year-end, making it harder to expect a retest of this month’s lows,” said David Russell, global head of market strategy at TradeStation. To be sure, Powell did not indicate when, or by how much, interest rates would be potentially lowered. Traders remain unanimous in their forecast for a rate cut at the Fed’s September policy meeting, however, per the CME Group’s FedWatch Tool. Orders for long-lasting items such as appliances, aircraft and computers surged in July, pushed by demand for transportation equipment, the Census Bureau reported Monday. So-called durable goods orders soared by 9.9%, reversing a downwardly revised 6.9% slump in June and easily topping the Dow Jones estimate for an increase of 4%. However, excluding the vital transportation category, orders actually declined 0.2%, as the sector posted a 34.8% increase. The U.S. 10-year Treasury yield was lower on Monday, continuing a downward trend after Federal Reserve Chair Jerome Powell last week gave his strongest indication yet that rate cuts are near. The yield on the 10-year Treasury slipped 3 basis points to 3.778%, while the 2-year Treasury yield lost 2 basis points to 3.891%. Asia-Pacific markets were mixed on Monday amid escalating tensions in the Middle East with Israel and Hezbollah trading strikes, while investors assessed dovish comments from U.S. Federal Reserve Chairman Jerome Powell. Japan’s Nikkei 225 fell 0.66% to 38,110.22, while the Topix lost 0.87% and closed at 2,661.41. The Japanese yen strengthened 0.42% to trade at 143.5, its strongest level since the Aug. 5 stock sell-off. South Korea’s Kospi dropped 0.14% to end at 2,698.01, and the small cap Kosdaq slid 0.84% to 766.79, marking its fourth straight day of losses. Australia’s S&P/ASX 200 gained 0.76% and finished at 8,084.5, just 30 points away from its all-time high. Hong Kong Hang Seng index rose 1.11% as of its final hour of trade, but the mainland Chinese CSI 300 index inched 0.09% lower and ended at 3,324.22. Crude oil futures gained nearly 3% on Monday amid reports of a production halt in Libya and after Israel and Hezbollah traded a barrage of strikes across the Lebanon border. Libya’s eastern government in Benghazi said Monday that oil production and exports in the North African country would shut down, amid a dispute with the internationally recognized western government in Tripoli over who should lead the central bank. West Texas Intermediate October contract: $76.89 per barrel, up $2.06, or 2.75%. Year to date, U.S. crude oil has gained 7.3%. Brent October contract: $81.09 per barrel, up $2.07, or 2.62%. Year to date, the global benchmark has advanced 5.3%. Gold held near record highs on Monday, buoyed by a softer dollar and dovish remarks from U.S. Federal Reserve Chair Jerome Powell bolstering expectations of a September interest rate cut. Spot gold was up 0.6% to $2,524.30 per ounce at 0940 GMT, about $7 shy of the record high of $2,531.60 hit last week. U.S. gold futures also gained 0.6% to $2,560.40. The dollar hit its lowest in more than a year, making gold less expensive for other currency holders, while benchmark 10-year Treasury yields also eased.
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