Traders' diminished expectations of future rate cuts drove US equity futures lower Monday before the opening bell. The Dow Jones Industrial Average futures were off 0.1%, S&P 500 futures were down 0.6%, and Nasdaq futures were 0.9% lower on the first trading day following the December US jobs report.
This report showed better-than-expected employment numbers, indicating diminished chances for monetary easing, which has left traders concerned about how it could impact future market movements. Interestingly, oil prices advanced during this time. The front-month global benchmark North Sea Brent crude saw an increase of 1.9%, reaching $81.26 per barrel, while US West Texas Intermediate crude rose by 2.3%, hitting $78.29 per barrel.
These price changes are significant as they often reflect broader economic sentiments. On the economic calendar, the US Treasury's monthly release on the government surplus or deficit is scheduled for today, which will reflect policy expectations on spending and taxation. Generally, if the deficit is higher, the government must issue more treasury bonds to finance its budget, a factor that can significantly influence market perceptions and investor confidence. Globally, stock indexes reflected mixed sentiments; Japan's Nikkei closed 1.1% lower, Hong Kong's Hang Seng ended 0.3% lower, and China's Shanghai Composite also finished 0.3% down.
Concurrently, in Europe, the UK's FTSE 100 fell 0.3%, and Germany's DAX index lost 0.5% in the early afternoon session. Within the equities market, pharmaceutical stocks surged on positive merger news. Notably, SAGE Therapeutics experienced a remarkable upturn with shares rising over 37% before the opening bell.
This spike followed news on Friday that SAGE received a $7.22 per share acquisition offer from Biogen. Similarly, Intra-Cellular Therapies saw shares climb nearly 35% after it was reported that the company is in the process of being acquired for $14.8 billion by Johnson & Johnson. Among the premarket losers, tech company SEALSQ faced a downturn, with shares falling by 13%.
This decline followed heightened volatility events that led to a trading halt on Friday. Additionally, e-boat maker Vision Marine Technologies witnessed a substantial drop of nearly 28% after announcing it was selling nearly half its shares in a private placement. Such fluctuations in stock prices emphasize the volatility and uncertainty present in today’s market, driven by various external and internal economic factors..