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Wall Street futures are slightly higher on Monday with investors gearing up for the start of the week. Futures tied to the Dow Jones Industrial Average rose 0.30%, while the S&P 500 and Nasdaq futures gained 0.16% and 0.08%, respectively.
The uptick comes after the S&P 500 and Nasdaq posted their strongest weekly performance in over a month. Traders are awaiting the July consumer price index (CPI) report, due Tuesday, to assess inflation trends and how they might influence US monetary policy.
A major US tariff deadline is posing a dilemma to chip companies. The government has asked giant semiconductor manufacturers NVIDIA and Advanced Micro Devices (AMD) to provide it with 15% of their sales of advanced computer chips in China. This requirement forms a part of an agreement that enabled these corporations to acquire export licenses for their Nvidia H20 and AMD MI308 chips.
The deal follows heightening tensions between the US and China over issues of trade and national security and is set to expire on Tuesday, further complicating US-China relations. Though some analysts see it as a move that has to be adopted to ensure that the US is able to maximize its manufacturing advantages, there are concerns that this may cause pressure in supply chains all over the world.
Lithium Stocks have become popular as a significant stakeholder in the energy industry. The Albemarle and Lithium Americas stocks soared when China Contemporary Amperex Technology (CATL) paused its operations at one of the major mines. The freeze has caused suspicion regarding whether there will be shortages of the possible supply, which may help to ease the consistent over-supply situation in the stock market.
The suspension of production by CATL has raised hopes among investors, as they expect the action to raise lithium prices. Albemarle's share increased by 11%, and Lithium Americas' by 8.2%. The transition signals the increased significance of lithium within the electric vehicle (EV) and renewable energy sectors, in which it plays an essential role in batteries.
Investor sentiment is still positive, as there is an expectation that the US Federal Reserve can take a more dovish position towards the end of the year. After recent indicators of weakness in the labor market and changes in the Federal Reserve's strategies, traders are placing wagers on a cut in borrowing rates. A Reuters survey shows investors anticipate a Fed rate cut of about 60 basis points by December.
This anticipation comes after the earnings season's superior-than-forecast results, which alluded to fears that the economy was slacking. Investors have been adjusting positions, adding to equity exposure in emerging markets and utilities, and decreasing involvement in healthcare and real estate. Amid the panic regarding stagflation, the S&P 500 is at or close to record highs, as mega-cap stocks, such as Apple, are performing strongly.
