Stock Market News: Dow, S&P 500 Set to Open Down

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U.S. stock futures were falling early Monday after a strong jobs report Friday diminished hopes that the federal Reserve will lower interest rates this year.

Dow Jones Industrial Average futures were down 50 points, or 0.1%. S&P 500 futures were also down 0.1%, while those on the Nasdaq composite were falling less than 0.1%.

The Fed delivers its latest decision on Wednesday, the same day new data for the consumer price index are released. While traders earlier this year had hoped for rate cuts by now, inflation has remained sticky and growth hasn’t cooled much. Fed Chairman Jerome Powell will hold a press conference after the decision that could give further clues about the outlook.

“It’s not very often you have a U.S. CPI released on the same day as a Fed meeting,” said Jim Reid, a strategist at Deutsche Bank. “Powell’s press conference will no doubt offer nuances around any changes and will have the ability to put a dovish or hawkish spin on them. At this stage optionality will likely be preferred with little specific guidance.”

Traders now see the Fed waiting until at least September before cutting rates, according to the CME FedWatch tool.

The yield on the benchmark 10-year Treasury note stood at 4.459% early Monday, unchanged from Friday but still substantially higher than the 4.3% seen before Friday’s jobs report. The two year yield was at 4.891%, also about 0.2 higher than the middle of last week.