Investing.com – Wall Street futures pointed to a flat and slightly higher open on Monday, as investors looked ahead to the publication of data on manufacturing activity in the U.S.
The blue-chip Dow futures gained 13 points, or 0.07%, by 10:53AM GMT, or 6:53AM ET, the S&P 500 futures rose 1 point, or 0.06%, while the tech-heavy Nasdaq 100 futures inched forward 1 point, or 0.02%.
New York Fed president William Dudley said at an international central bankers conference in Bali on Monday that investors are underestimating how many times policy makers in the world’s largest economy will raise interest rates.
He added that the Fed could hike rates before the November U.S. election if the economy and labor market improve quickly.
In a similar stance, Dallas Fed chief Robert Kaplan insisted that a September hike was still on the table, though he admitted that the U.S. central bank needed to see how things unfold.
“So it’s still too soon to jump to a conclusion,” Kaplan told Bloomberg in an interview and added that the Fed should be “very watchful for the next number of data releases to see what trend we’re on.”
The weak reading of U.S. second quarter gross domestic product last Friday pared market expectations for the Fed’s next move towards policy normalization.
The odds for a hike in September dropped to 12% from 18% the prior day with chances for a December hike notched down to just 33%, according to CME Group’s FedWatch tool.
On Monday, the dollar pulled back from a five-week low hit after the GDP data, as investors looked ahead to the publication of the U.S. ISM manufacturing PMI for July at 14:00GMT, or 8:00AM ET.
At the same time, June construction spending will be released.
Meanwhile, oil prices struggled near three-month lows on Monday, as signs of increasing production in the U.S. and rising output among members of the Organization of the Petroleum Exporting Countries (OPEC) weighed.
U.S. crude futures lost 1.25% to $41.08 by 10:55AM GMT, or 6:55AM ET, while Brent oil traded down 1.36% to $42.94.
Elsewhere, Asian shares in general hit a one-year peak as chances of a Fed rate hike receded after the publication of Friday’s GDP data, but China was hit by tighter regulation a divergent readings on manufacturing activity.
Data earlier showed on Monday that China’s official manufacturing purchasing managers’ index ticked down to 49.9 in July from 50.0 the previous month, compared to expectations for an unchanged reading.
A reading below 50 indicates a contraction in the sector.
However, the Caixin manufacturing PMI rose to 50.6 last month from 48.6 in June, compared to expectations for an uptick to 48.7.
European stocks initially opened higher on Monday with eyes on financial stocks as the stress test results from the European Banking Authority released late Friday showed that four banks failed and one Italian bank, Banca Monte dei Paschi di Siena SpA (MI:BMPS), ended up with a negative capital ratio, spurring another rescue plan.
However, bullish sentiment in stocks was later hit as the euro zone manufacturing PMI showed that factory growth eased in July.
The benchmark Euro Stoxx 50 was down 0.45% at 10:55AM GMT, 6:55AM ET.
In the U.K., the pound was edging lower against the dollar with London’s FTSE 100 trading 0.27% lower after the country’s manufacturing PMI hit its lowest level since early 2013, spurring speculation that the Bank of England will cut interest rates on Thursday.