Stock Index Futures Climb as Tech Stocks Rebound, U.S. Inflation Data and SpaceX IPO Awaited

June S&P 500 E-Mini futures (ESM26) are up +0.71%, and June Nasdaq 100 E-Mini futures (NQM26) are up +1.40% this morning, signaling a rebound from Friday’s selloff on Wall Street as investors stepped in to buy the dip in technology stocks even as tensions in the Middle East pushed oil prices higher.

The price of WTI crude initially climbed nearly +5% after Israel and Iran exchanged fire. In several waves of strikes, the two sides attacked each other for the first time since a U.S.-brokered ceasefire came into effect in April. However, oil prices trimmed earlier gains to trade below $92 a barrel after U.S. President Donald Trump said on Monday in a post on Truth Social that both sides are “looking to do” an immediate ceasefire. He added, “Final negotiations on ‘Peace’ are proceeding, subject to ignorance or stupidity getting in its way.” Meanwhile, the Fars news agency reported that Iran’s central military command said its military operation against Israel has ended.

Treasuries fell on Monday, with the benchmark 10-year yield rising two basis points to 4.54% as traders boosted bets that the Federal Reserve will raise interest rates this year.

This week, market participants look ahead to the release of key U.S. inflation data, an earnings report from cloud-computing and database company Oracle, and SpaceX’s initial public offering.

In Friday’s trading session, Wall Street’s major equity averages closed sharply lower, with the S&P 500 and Nasdaq 100 falling to 2-week lows. The Magnificent Seven stocks sank, with Tesla (TSLA) and Nvidia (NVDA) slumping over -6%. Also, chip and AI infrastructure stocks cratered, with Marvell Technology (MRVL) tumbling more than -16% to lead losers in the Nasdaq 100 and Micron Technology (MU) plunging over -13% to lead losers in the S&P 500. In addition, Lululemon Athletica (LULU) slid more than -8% after the athleisure retailer cut its full-year guidance. On the bullish side, Cooper Cos. (COO) climbed over +8% and was the top percentage gainer on the S&P 500 after the medical device maker posted better-than-expected FQ2 results.

The Labor Department’s report released on Friday showed that nonfarm payrolls rose by 172K in May, which is more than double what analysts had forecast. Also, the U.S. May unemployment rate stayed unchanged at 4.3%, in line with expectations. In addition, U.S. May average hourly earnings rose +0.3% m/m and +3.4% y/y, in line with expectations. Finally, U.S. consumer credit rose by $20.73 billion in April, stronger than expectations of $17.8 billion.

“The economy is growing and evolving in such a way that there is almost no chance of a cut in 2026. If energy prices correct to the downside and productivity gains lead to reduced inflation expectations in 2027, then the discussion of rate cuts can begin again,” said Thomas Simons, chief U.S. economist at Jefferies.

Cleveland Fed President Beth Hammack said on Friday that raising interest rates may soon be appropriate as the labor market appears to be in balance. “For today, it’s reasonable to keep rates steady given the uncertainties around the economic outlook. But if recent [data] trends continue, it may soon be appropriate to act,” Hammack wrote in a post on social media.

U.S. rate futures have priced in a 98.0% probability of no rate change and a 2.0% chance of a 25 basis point rate cut at next week’s monetary policy meeting.

BNP Paribas on Friday became the first major bank to factor Fed rate hikes into its year-ahead forecast, telling clients it expects the U.S. central bank to unwind all three of last year’s cuts through a series of increases starting in December.

The U.S. consumer inflation report for May will be the main highlight this week, as investors assess the likelihood that the Fed will raise interest rates this year. The report comes after Friday’s surprisingly strong jobs data prompted traders to boost bets on a Fed rate hike by year-end. Economists project the consumer price index to jump +4.2% in May from a year earlier, marking the fastest pace in more than three years. The U.S. May Producer Price Index will also draw close attention, providing further insight into the impact of the Middle East conflict across the supply chain. Other noteworthy data releases include the University of Michigan’s consumer sentiment index (preliminary), Initial Jobless Claims, Trade Balance, and Existing Home Sales.

Market participants will also focus on earnings reports from several notable companies, with Oracle (ORCL), Adobe (ADBE), and Lennar (LEN) scheduled to release their quarterly results this week.

U.S. central bankers are in a media blackout period ahead of new Fed Chair Kevin Warsh’s first Federal Open Market Committee meeting, which begins on June 16th, so they are prohibited from making public comments on the economic outlook or policy this week. Fed policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Fed blackout periods.

Meanwhile, the long-anticipated, blockbuster initial public offering of Elon Musk’s rocket and AI company SpaceX is slated for this week. SpaceX is aiming to raise $75 billion, the largest amount ever for an IPO, in a deal that would value the company at $1.75 trillion. Pricing is expected on Thursday, with trading set to begin on the Nasdaq the following day.

The U.S. economic data slate is largely empty on Monday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.54%, up +0.44%.

The Euro Stoxx 50 Index is down -0.63% this morning as escalating tensions in the Middle East sapped risk appetite, while investors braced for the European Central Bank’s first rate hike since 2023. Rate-sensitive construction and retail stocks led the declines on Monday. Data released on Monday showed that Germany’s monthly factory orders fell more than expected in April, with weak demand likely to persist amid heightened uncertainty stemming from the Middle East conflict. Separately, the Sentix index gauging investor morale in the Eurozone rebounded more than expected in June, as fears of a sharp economic slowdown eased. Meanwhile, Eurozone government bond yields rose to multi-week highs on Monday as the exchange of fire between Israel and Iran drove oil prices higher, stoking inflation concerns. Investor focus this week is on the monetary policy decision from the European Central Bank. The ECB is widely expected to raise the deposit rate by 25 basis points to 2.25% to offset the inflationary effects of higher oil prices stemming from the Middle East conflict. “In the absence of hard evidence of second-round effects and amidst the heightened uncertainty, this move is predominantly meant to mitigate the risk of de-anchoring inflation expectations,” according to Morgan Stanley analysts. Investors will closely monitor any signals ECB policymakers provide on the likely timing of future rate hikes. Money markets are currently nearly fully pricing in two additional ECB rate hikes by year-end. Beyond monetary policy, attention will center on final May inflation numbers from Germany, France, and Spain. In corporate news, Monte dei Paschi di Siena (BMPS.M.DX) jumped over +11% after Intesa Sanpaolo, Italy’s largest banking group, announced a 30.6 billion euro ($35 billion) unsolicited cash-and-stock offer to acquire the lender. At the same time, Zealand Pharma A/S (ZEAL.C.DX) plummeted more than -26% after trial results showed its obesity drug survodutide had more severe side effects and higher patient dropout rates than competing treatments.

Germany’s Factory Orders and Eurozone’s Sentix Investor Confidence Index were released today.

The German April Factory Orders fell -3.8% m/m, weaker than expectations of -2.2% m/m.

The Eurozone June Sentix Investor Confidence Index came in at -13.4, stronger than expectations of -13.8.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.70%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -3.85%.

China’s Shanghai Composite Index closed lower and hit a two-month low today, tracking a global tech selloff. Semiconductor stocks were among the biggest losers on Monday. The technology sector came under pressure following Friday’s tech-led selloff on Wall Street as a stronger-than-expected U.S. jobs report boosted bets that the Fed will raise interest rates by year-end. Sentiment was further dampened by escalating tensions between Iran and Israel. Still, the benchmark index trimmed some of its earlier losses in the afternoon session as some investors viewed the correction as a buying opportunity. Wu Zhou, fund manager at Shenzhen Deyuan Investment Co., said, “The market opened lower as expected, and then performed much better than expectations. There’s ample liquidity in the domestic market, and investors today are shifting money away from expensive stocks to relatively cheap ones, such as robotics.” Meanwhile, robotics component supplier Leader Harmonious Drive Systems Co. climbed about +9% on Monday. Investor attention this week is on China’s key inflation gauges for May. Economists expect China’s consumer inflation to pick up slightly, while producer prices are projected to accelerate to their fastest pace in nearly four years. China’s May trade data will also draw attention and is expected to show continued strength in exports.

Japan’s Nikkei 225 Stock Index closed sharply lower today as tech stocks cratered amid growing bets on a Fed rate hike following strong U.S. jobs data. Chip and other AI-related stocks sank on Monday, following Friday’s selloff in their U.S. peers, as concerns over rising U.S. interest rates compounded continued worries about AI spending and elevated valuations. Memory chipmaker Kioxia Holdings slumped over -8% and tech investor SoftBank Group fell more than -6%, weighing heavily on the Nikkei. Andrew Jackson, head of Japan equity strategy at Ortus Advisors, said the upcoming IPO of SpaceX was likely adding to the pressure, as investors trimmed positions ahead of the blockbuster listing. Escalating tensions in the Middle East further dampened risk appetite after Iran and Israel exchanged strikes. The benchmark index posted its largest daily percentage drop since March 9th. Meanwhile, Japanese government bond yields climbed on Monday as rising oil prices due to a worsening of the Middle East conflict fueled inflation concerns. On the economic front, revised government data showed on Monday that Japan’s economy expanded at a slightly slower pace than initially estimated in the first quarter due to weak capital expenditure, though it remained on a recovery path, sustaining expectations that a Bank of Japan rate hike is imminent. Investor focus now shifts to Japan’s PPI data due later this week, which is expected to show that cost pressures on companies remained elevated in May. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +14.42% to 32.46.

The Japanese Q1 GDP Annualized was revised downward to +1.8% q/q from the initial estimate of +2.1% q/q.

The Japanese April Current Account n.s.a. stood at 3.907 trillion yen, stronger than expectations of 3.137 trillion yen.

The Japanese May Economy Watchers Current Index came in at 43.6, stronger than expectations of 41.9.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks staged a modest rebound in pre-market trading, with Marvell Technology (MRVL) climbing over +6% and Micron Technology (MU) rising more than +3%. Notably, S&P Dow Jones Indices announced on Friday that Marvell would join the S&P 500 on June 22nd.

Most members of the Magnificent Seven stocks edged higher in pre-market trading, with Nvidia (NVDA) rising over +2% and Tesla (TSLA) gaining more than +1%.

Eli Lilly (LLY) advanced nearly +4% in pre-market trading after a late-stage trial showed its drug was effective in weight loss and in easing obesity-related conditions.

Cummins (CMI) rose more than +2% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $850.

Travel stocks slid in pre-market trading as oil prices rose, with Southwest Airlines (LUV) and Norwegian Cruise Line Holdings (NCLH) falling about -2%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - June 8th

Pershing Square (PS), The Campbell’s Company (CPB), Vail Resorts (MTN), Graham (GHM), Oil-Dri Corporation of America (ODC), FuelCell Energy (FCEL), Mission Produce (AVO), Mama's Creations (MAMA), Gloo Holdings (GLOO), Motorcar Parts of America (MPAA), Duluth Holdings (DLTH), AstroNova (ALOT), Optical Cable (OCC).