US pre-open: Futures trade lower following Chinese data

Wall Street futures had stocks opening modestly lower on Monday as Chinese data and comments from the Fed's Neel Kashkari were in focus ahead of the bell.

As of 1230 BST, Dow Jones futures were down 0.05%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.18% and 0.16% weaker, respectively.

The Dow closed 315.50 points higher on Friday, closing out the best week for stocks since 2020 firmly in the green.

Second quarter earnings season remains in full effect this week, with retailer Loews reporting before the open and software outfit Activision Blizzard updating on its most recent trading performance after the close.

Ride-sharing giant Uber and trade bellwether Caterpillar will report before the week is out, as will Starbucks, Eli Lilly, and Amgen.

Data out of China was also drawing an amount of investor attention ahead of the bell, with the nation's recent rebound beginning to stall, with the Chinese Manufacturing PMI dropping into contraction territory to print at 49 - down from its previous reading of 50.2.

AvaTrade's Naeem Aslam said: "Futures are trading soft today as traders are digesting the economic numbers out of China. The data has largely disappointed investors.

"If that is the reason, then there is less to worry about as such lockdowns are on the decline, and in the coming weeks, we should see improvement in the economic data. However, if the weakness in the economic numbers isn’t due to the lockdowns but in fact, due to the cautionary tone adopted by corporates in their spending and paying due to the mounting recession fear, then we are looking at a picture that requires a great deal of attention."

Market participants also digested comments from the Federal Reserve's Neel Kashkari over the weekend, with the central banker stating the Fed, which hiked rates by 75 basis points last week, was committed to bringing inflation down to 2%, something that would require US interest rates going into the double-digit territory and that the process of front loading hasn't come to an end just yet.

On the macro front, S&P Global's final manufacturing PMI for July will be published at 1445 BST, while last month's ISM manufacturing PMI and June construction spending figures will follow at 1500 BST.

Reporting by Iain Gilbert at Sharecast.com