Dow Jones Futures Advance Ahead Of ISM Services PMI

• Dow Jones futures climb as weak US labor data tempered market expectations for a September rate hike.

• The CME FedWatch tool shows September Fed rate hike odds fell to 45.0%, down from 48.3% just one week ago.

• US index futures gain after Wall Street built record momentum last week, with a 2% Dow Jones rally.

The Dow Jones futures gain 0.18% to trade above 53,280, while S&P 500 futures rise 0.46%, trading near 7,560. Meanwhile, Nasdaq 100 futures advance 1.03% to trade near 29,860 during European trading hours on Monday.

Traders will likely be closely monitoring the US ISM Services PMI due later in the day for immediate direction, though the primary focus has shifted to Wednesday’s release of the Fed's June policy Meeting Minutes for clearer guidance on the future path of interest rates.

US stock futures climb as weak US labor data force markets to temper expectations for a September hike. The CME FedWatch tool indicates that markets price in 45.0% of 25-basis-point Fed rate hike in September, down from the 48.3% a week ago. However, financial markets are currently pricing in around a 76% probability of rate hikes by year-end.

June's Nonfarm Payrolls (NFP) grew by just 57,000, well below the 110,000 forecast. While the headline unemployment rate unexpectedly ticked down to 4.2% from May's 4.3%, the aggressive slowdown in hiring underscores a broader economic cooling.

Additionally, easing oil prices have helped dampen the inflationary pressures that previously heightened fears of aggressive rate hikes. Energy markets moved lower due to recovering flows through the Strait of Hormuz and the prospect of increased OPEC+ supply.

US index futures gain after Wall Street built its record-setting momentum last week, with the Dow Jones rallying nearly 2% to approach the 53,000 milestone, while the S&P 500 and Nasdaq 100 advanced 1.8% and 2.1%, respectively. These market gains developed despite a pullback in semiconductor stocks. Instead, the rally was fueled by the healthcare, financials, and industrials sectors, all of which closed the week at fresh record highs.