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US premarket on June 1, 2022

On Wednesday, US stock index futures halted their upside movement but remained in the channel formed on Tuesday. The yield of US Treasury bonds increased as investors debate how much monetary tightening is necessary to fight inflation. S&P 500 and NASDAQ futures edged up by 0.25% and 0.20% respectively, while Dow Jones futures remained unchanged. The yield of 10-year US Treasury bonds approached 2.9% as many investors reassessed their expectations of further Fed interest rate hikes.

In the commodities market, oil bounced up slightly after yesterday's drop. Investors assessed the future of united OPEC+ in the run-up to its ministerial meeting on Thursday. The meeting will discuss supply policy for July. In May, crude oil increased by about 10%, increasing inflation anxiety among market players.


The upside in the stock market is limited by not only interest rate increases by the central bank, but also a possible recession in the future, which could lead to monetary policy adjustments. US markets are expected to continue their irrational swings as bulls try to buy the dip during a downtrend.

During a recent meeting with Fed chair Jerome Powell, Joe Biden stated he would not influence the regulator's decision-making process, while stating that the Fed holds responsibility for quelling record-high inflation ahead of the midterm elections in November. The meeting happened in the run-up to the release of US average hourly earnings data on Friday.


Premarket movers:

Shares of Capri Holdings, a parent company of such luxury brands as Michael Kors, Versace and Jimmy Choo, surged by 11% during the premarket after the release of better-than-expected quarterly earnings. Capri's adjusted earnings per share were $1.02, 20 cents above estimates.

Shares of HP Inc. were mostly unchanged after the company's adjusted quarterly profit beat estimates by 3 cents and reached $1.08 per share. Thanks to strong commercial customer demand, HP raised its profit outlook.

Victoria's Secret jumped by 6.8% during the premarket, despite mixed quarterly results. The company's adjusted earnings per share of $1.11 beat estimates of 84 cents, while its revenues matched forecasts.

On the technical side, if S&P 500 bulls prevent the index from breaking below $4,122, its next target would be the resistance at $4,157, which was unsuccessfully tested yesterday. However, it is the beginning of a new month, and it could affect the market and the ongoing uptrend. A breakout above $4,157 would push the index towards $4,197 and $4,234. If pessimism prevails in the market amid statements of Fed policymakers about a more aggressive monetary policy, the S&P 500 could enter a sell-off and drop towards $4,089. If the index breaks below this level, it could then plunge towards the new lows at $4,050 and $4,013, as well as $3,975 further below.

Trading analysis offered by RobotFX and Flex EA.