Five things you need to know before the market opens on Monday June 26:
1. -- Stock Lower, Oil On The Rise As Russia Crisis Rattles Markets
U.S. equity futures nudged lower Monday, while Treasury bond prices firmed and gold rebounded from a three-month low as investors adopted a defensive tone amid questions over the longer-term impact of weekend developments in Russia and the threat to President Vladimir Putin's leadership.
A short-lived insurrection by troops under the command of Yevgeny Prigozhin, a long-time Putin ally, ended late Saturday with the Wagner Group leader brokering a move to neighboring Belarus and Russia agreeing not to prosecute any of the soldiers involved in the convoy.
However, while Putin appears to have maintained his grip on power, questions as to the fate of the nation's army in Ukraine without Wagner support, and the outcome of next month's NATO summit in Vilnius, have added a notable tenor of uncertainty to global markets.
Oil prices, which initially jumped on fears of supply constraints, pared some of those gains Monday as traders continue to focus on demand weakness from China and the ongoing implications from central bank rate hikes around the world.
Brent contracts for August delivery, the global pricing benchmark, added 35 cents to trade at $74.20 per barrel while WTI future for the same month, which are tightly-linked to U.S. gasoline prices, rose 28 cents to $69.44 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.09% lower at 102.762 while 2-year Treasury note yields eased to 4.707% in defensive overnight trading and gold rose 0.2% to $1,925.00 per ounce.
Stocks are looking to extend last week's declines, which included the worst five-day run since early March, with data from Refinitiv Lipper showing U.S. equity funds losing $16.5 billion in net outflows, the worst since March 29, amid a series of hawkish central bank signals and Capitol Hill testimony from Federal Reserve Chairman Jerome Powell.
On Wall Street, futures contracts tied to the S&P 500 were indicating a 7 point opening bell decline and those linked to the Dow Jones Industrial Average priced for a 32 point move to the downside. The tech-focused Nasdaq, which snapped an eight-week winning streak on Friday, is looking at a 37 point decline.
In overnight Asia trade, Japan's Nikkei 225 fell 0.25% following comments from a senior finance ministry official suggesting the government could intervene to support the weakened yen if needed, adding to speculation that the Bank of Japan may soon tweak its ultra-low policy rates.
In Europe, the region-wide Stoxx 600 was marked 0.42% lower as investors left risk markets in the wake of weekend chaos in Russia, while Britain's resource-heavy FTSE 100 fell 0.5% in London.
2. -- Week Ahead: Fed Inflation Gauge, Powell Speeches In Focus
Inflation data will take center stage on Wall Street again this week as markets continue to test the Federal Reserve's resolve to execute two more rate hikes between now and the end of the year.
The Bureau of Economic Analysis will publish the Fed's preferred inflation reading, the core PCE Price Index, for the month of May on Friday, following on from Commerce Department figures earlier this month that showed headline CPI falling to a fresh 2-year low of 4%. Economists are expecting a month-on-month reading of 0.4%, with the headline slowing to 5.7%.
Commerce will also publish its third estimate of first quarter GDP growth, which ix expected to show growth nudging modestly higher, to 1.4%, from the previous tally of 1.3%, when the data is released on Thursday.
Other data releases of note include May durable goods orders on Tuesday, mortgage rate figures on Wednesday and pending home sales and weekly jobless claims on Thursday.
Fed Chair Jerome Powell is also slated to speak this week at the European Central Bank's annual monetary policy retreat in Sintra, Portugal on Wednesday morning at 9:30 eastern time and again at 2:30 eastern time the following day.
A light week of corporate earnings will include updates from Dow component Walgreens Boots Alliance (WBA) on Tuesday, Micron Technology (MU) on Wednesday and Nike (NKE) on Thursday.
3. -- IBM Slips On Reports of $5 Billion Appito Software Deal
International Business Machine (IBM) shares slipped lower in pre-market trading following reports that the tech giant is preparing a $5 billion takeover of IT budgeting and forecasting software group Apptio.
The deal, first reported by the Wall Street Journal, would see IBM paying between $4.5 and $5 billion for Bellevue, Washington-based Appito, which is currently owned by the Vista Equity Partners private equity group.
Last month, IBM provided its strongest hint yet of a push into AI and automation-lead investments when CEO Arvind Krishna said he would slow hiring in human resources and certain 'back office' areas of the group, adding that around a third of the group's non-customer facing roles could be replaced by AI and automation over the next five years.
IBM shares were marked 0.55% lower in pre-market trading to indicate an opening bell price of $128.72 each.
4. -- Tesla Extends Slide After Goldman Sachs Downgrade
Tesla (TSLA) shares extended declines in pre-market trading after analysts at Goldman Sachs lowered their rating on the EV maker, citing near-term pressure on the group's profit margins.
Goldman analysts, lead by Mark Delaney, lowered their rating on Tesla to 'neutral' from 'buy', adding that the stock's recent rally could be giving "more credit for its longer-term opportunities" while not properly discounting near-term margins pressures linked to a difficult pricing environment.
Goldman did, however, boost its price target on Tela by $63, to $248 per share, in recognition of its longer-term earnings potential.
Tesla shares were marked 1.9% lower in pre-market trading to indicate an opening bell price of $251.73 each.
5. -- Carnival Earnings On Deck Amid Ongoing Travel Surge
Carnival Corp. (CCL) shares moved higher in pre-market trading ahead of the cruise line operator's second quarter earnings prior to the opening bell.
Analysts expect Carnival to post a huge increase in revenues, which are forecast to nearly double from last year to $4.766 billion, as travelers return following two years of Covid-linked disruptions and overall bookings hit all-time highs.
Higher costs, however, are likely to keep Carnival in the red, with losses for the three months ending in May estimated at 34 cents per share, improving from a loss of $1.64 per share over the same period last year.
Investors are likely to focus on the group's occupancy rate, which remained below 2019 levels over the first quarter, as well as its ability to generate positive cash flow amid the ongoing surge in travel demand.
Carnival shares were marked 0.63% higher in pre-market trading to indicate an opening bell price of $15.90 each.
