June 13, 2019
By Shreyashi Sanyal
(Reuters) – U.S. stock index futures ticked higher on Thursday after two days of weakness, as energy shares gained on rising oil prices and investors remained hopeful of an interest rate cut by the Federal Reserve.
Crude prices rose as much as 4%, a day after hitting 5-month lows after a suspected attack on two tankers in the Gulf of Oman near Iran and the Strait of Hormuz, through which a fifth of global oil consumption passes.
Shares of oil majors Exxon Mobil Corp and Chevron Corp rose 1% each in premarket trading. The S&P energy index has been the worst-performer among the 11 major S&P sectors so far this year.
Still, Wall Street’s main indexes have had a strong start to the month on hopes that the Federal Reserve will act to counter a slowing global economy due to the escalating trade war with China. The benchmark S&P 500 index has risen 4.6% so far in June.
Expectations of an interest rate cut rose after U.S. consumer prices data on Wednesday pointed to a moderate rise in inflation. The Fed policymakers are set to meet on June 18-19 and the markets have priced in at least three rate cuts in 2019.
Adding to the optimism, Chinese Vice Premier Liu He suggested Beijing would soon unveil more policies to bolster growth in the world’s second largest economy amid rising U.S. trade pressure.
At 7:18 a.m. ET, Dow e-minis were up 93 points, or 0.36%. S&P 500 e-minis were up 11.25 points, or 0.39% and Nasdaq 100 e-minis were up 42.5 points, or 0.57%.
However, on the trade front, there were doubts about any improvement in what President Donald Trump called “testy” trade relations with China in the run up to the G20 summit later in this month.
Energy stocks also led the gains on the benchmark index. Apache Corp, Schlumberger NV and Cimarex Energy Co rose between 1% and 1.8%.
Walt Disney Co shares rose 0.7% after Morgan Stanley raised its forecast for Disney Plus subscriber growth.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)