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Stock futures dipped on Monday as investors feared a hot jobs report would delay interest-rate cuts.
- Wall Street is looking to Consumer Price Index data on Wednesday to help gauge inflation.
- A tight labor market can fuel inflation by driving up wages, which pushes up prices.
Traders were in a cautious mood on Monday following the release of a hot jobs report on Friday, which could combine with a stubborn inflation reading this Wednesday to mean interest rates stay higher for longer.
Futures underlying the S&P 500 and Dow Jones Industrial Average slid by about 0.1%, while Nasdaq 100 futures were flat. The US Dollar Index inched up by 0.1% to 104.37 points, while the key 10-year Treasury yield climbed to 4.45%.
US employers added 303,000 workers to their payrolls in March, more than Wall Street expected. Strong employment supports consumer spending, corporate profits, and overall economic growth. But it can also fuel inflation as a tight labor market pushes up wages, and employers pass on their increased costs by raising prices.
The Federal Reserve is waiting to bring down interest rates until it's clear the inflation threat has receded. Friday's strong jobs report could make it think twice about making its first cut in June as many expected. Consumer Price Index data for March is due out on Wednesday.
"We have CPI numbers in the US to look forward to, following a much hotter read on employment numbers last week than hoped for," Hargreaves Lansdown's Sophie Lund-Yates said in a morning note.
"Together with the starting gun for earnings season on Friday with financial bellwether JPMorgan Chase results, it's all eyes forward this week."
Earnings out Monday include Almarai Company in Saudi Arabia and Industrivaerden AB in Sweden. On the economic calendar, Chicago Fed President Austan Goolsbee is set to do a radio interview that could shed light on the Fed's thinking.