Renewable Energy

Wall Street set to open higher on gains in energy shares, rate cut hopes

Credit: REUTERS/BRENDAN MCDERMID

U.S. stocks were set to snap two days of weakness and open higher on Thursday, as energy shares gained on rising oil prices, with optimism of an interest rate cut adding to sentiment.

By Shreyashi Sanyal

June 13 (Reuters) - U.S. stocks were set to snap two days of weakness and open higher on Thursday, as energy shares gained on rising oil prices, with optimism of an interest rate cut adding to sentiment.

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 XOM.N and Chevron Corp CVX.N rose 1% each in premarket trading. However, the S&P energy index .SPNY has been the worst-performer among the 11 major S&P sectors so far this year.

"There is a positive correlation between stock markets and oil prices which is the day's catalyst," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

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 .SPX has risen 4.6% so far in June.

U.S. consumer prices data on Wednesday pointed to a moderate rise in inflation, adding to expectations of an interest rate cut as early as July. The Fed policymakers are set to meet on June 18-19 and markets have priced in at least three rate cuts in 2019.

But 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.

"There is still uncertainty about trade policy and about what the Fed is going to do. That is still keeping a lot of people back on their heels at this point," Brown said.

At 8:36 a.m. ET, Dow e-minis 1YMc1 were up 62 points, or 0.24%. S&P 500 e-minis ESc1 were up 6.5 points, or 0.23% and Nasdaq 100 e-minis NQc1 were up 22.5 points, or 0.3%.

Market sentiment was also supported by comments from Chinese Vice Premier Liu He, who suggested Beijing would soon unveil more policies to bolster growth in the world's second largest economy amid rising U.S. trade pressure.

Energy stocks led the gains among S&P 500 companies trading premarket. Concho Resources Inc CXO.N, Apache Corp APA.N and Noble Energy NBL.N rose between 2.6% and 4%.

Tyson Foods TSN.N rose 2.1% after the meat processor launched its first vegan and mixed protein products. Shares of vegan burger maker Beyond Meat BYND.O fell 3.9%.

Walt Disney Co DIS.N shares rose 1.4% after Morgan Stanley raised its forecast for Disney Plus subscriber growth.

(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Arun Koyyur)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ; Reuters Messaging: Shreyashi.Sanyal.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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