U.S. stock index futures remained flat in Monday morning trading, following the Dow Jones Industrial Average's record intraday and closing highs as investors await NVIDIA's earnings report.
Dow futures edged up 19 points, gaining 0.04%, while S&P 500 and Nasdaq 100 futures hovered near the flat line.
WTI and Brent crude opened slightly higher, trading at $63.66 per barrel and $67.31 per barrel respectively, while spot gold opened essentially flat.
On Friday, the blue-chip Dow surged 846.24 points, or 1.89%, to close at 45,631.74. The broader S&P 500 gained 1.52% to 6,466.91, with its intraday high coming within just 3 points of a record. Meanwhile, the tech-heavy Nasdaq Composite rose 1.88% to 21,496.53.
Markets rallied following Federal Reserve Chair Jerome Powell's highly anticipated annual speech in Jackson Hole, Wyoming, where he hinted that the central bank may begin easing monetary policy next month. According to the CME FedWatch tool, market expectations for a 25 basis point rate cut in September jumped from about 75% at the start of the week to approximately 84%.
"We've already seen signs of underlying rotation trades — money moving from tech stocks to more cyclical stocks and value stocks. So if market expectations for a Fed easing cycle continue to heat up, this momentum trade out of tech stocks could persist," said Adam Crisafulli, founder of Vital Knowledge. "This puts enormous pressure on the blockbuster earnings report due Wednesday."
Dell and Marvell are also set to report earnings on Thursday. Crisafulli noted that these companies' results could play a key role in determining whether the tech stock rebound resumes or if the rotation trade continues further.
For the remainder of the week, traders will also focus on Friday's release of the July Personal Consumption Expenditures price index — the Fed's preferred inflation gauge. According to economists surveyed by FactSet, core PCE is expected to rise 2.9% year-over-year, excluding volatile food and energy prices, up from June's 2.8% increase.