Intel stock extends gains after report of possible U.S. government stake
Investing.com - U.S. stock futures edged higher Monday despite the previous session’s hot inflation number, ahead of a key meeting between the leaders of the U.S. and Russia to discuss a possible ceasefire in Ukraine. Japan’s economy grew more than expected in the second quarter, while UnitedHealth stock soared after receiving the seal of approval from Warren Buffett’s Berkshire Hathaway.
1. Trump-Putin meeting in spotlight
U.S. President Donald Trump and Russian President Vladimir Putin are set to hold talks in Alaska later in the session to try and negotiate an end to the war in Ukraine, their first face-to-face talks since Trump returned to the White House.
The conflict has raged for over three years, and has severely disrupted the global supply chain, resulting in inflated commodity prices and the associated difficult economic consequences.
Trump threatened "severe consequences" if Putin does not agree to peace in Ukraine earlier in the week, but also indicated that these talks are likely to be the precursor to a subsequent three-way summit with Ukrainian President Volodymyr Zelenskiy - who was not invited to this meeting.
Trump added on the eve of the summit that he thought Putin would do a deal on Ukraine, and has also mentioned land transfers between the two countries as a possible way of coming to a solution.
Putin is likely to demand complete Russian control over the Donbas industrial region in eastern Ukraine, as well as Ukraine’s Kherson and Zaporizhzhia regions, terms that Ukraine would find hard to accept.
Ukraine and its European allies were heartened by a conference call on Wednesday in which, they said, Trump agreed Ukraine must be involved in any talks about ceding land.
This eased fears of a Trump-Putin deal that would leave Ukraine under pressure to make territorial and other concessions.
2. U.S. futures edge higher
U.S. stock futures rose Friday, but gains have started to slow as the broadly positive week comes to an end with a hot inflation number impacting sentiment.
At 03:05 ET (07:05 GMT), the S&P 500 futures traded 355 points, or 0.8%, higher Nasdaq 100 futures gained 17 points, or 0.3%, and Dow futures rose 24 points, or 0.1%.
The broad-based S&P 500 was able to post another record closing high on Thursday, but the NASDAQ Composite and the Dow Jones Industrial Average both closed lower.
This followed the release of a larger than expected jump in producer prices in July, which suggested that the Trump administration’s sweeping tariffs policy is causing inflation to course through the system.
Traders are still pricing in an over 90% probability of a 25 basis point rate cut at the Federal Reserve’s September meeting, but the market has now given up on hopes of a jumbo 50 basis point rate cut.
Still, largely positive corporate earnings have seen the Dow rise 1.7% week to date, with the S&P 500 and Nasdaq each adding around 1.2%.
Investors will keep an eye on the July retail sales release later in the session, looking for signs that the American consumer was starting to hold back on purchases.
3. UnitedHealth receives Buffett’s seal of approval
Shares in Unitedhealth Group (NYSE:UNH) soared in premarket trading after Warren Buffett’s Berkshire Hathaway disclosed late Thursday a new investment in the company.
Berkshire said, as part of a U.S. Securities and Exchange Commission filing, it owned 5.04 million UnitedHealth shares worth about $1.57 billion as of June 30.
The health insurer had seen its popularity slump as it became a target for many Americans upset over the direction of the nation’s healthcare, with its share price dropping 46% since January. .
For years, the company was seen as a blue chip with constraint profit gains and a reputation for competent management.
But in May, the company pulled its annual earnings outlook and CEO Andrew Witty stepped down. Last month, UnitedHealth gave a new 2025 outlook that was well short of Wall Street estimates.
It is also currently facing a Justice Department investigation into its Medicare billing practices.
Berkshire also said it sold 20 million shares of iPhone maker Apple (NASDAQ:AAPL) in the second quarter, and cut back another major holding, Bank of America (NYSE:BAC).
It also boosted its bet on home builders, revealing a new stake in DR Horton (NYSE:DHI) and significantly larger stake in Lennar (NYSE:LEN).
4. Japan’s economy running hot
Japan’s economy grew more quickly than expected in the second quarter, as export volumes held up well against new U.S. tariffs.
GDP grew 1% year-on-year in the April–June quarter, up from 0.6% seen in the first quarter, and was also well above the 0.4% anticipated, according to Cabinet Office figures released on Friday.
This represented the fifth straight quarter of expansion after the previous quarter’s contraction was revised to growth.
Quarter-on-quarter GDP rose by 0.3%, surpassing forecasts of 0.1%.
Japanese automakers, the nation’s top exporters, have largely offset U.S. tariff costs by cutting prices to keep domestic plants operating, helping exports avoid a major hit.
However, it may be difficult for the world’s fourth-largest economy to continue expanding at this pace given the global economic uncertainties fuelled by U.S. tariffs, especially as automakers struggle to keep prices down for American customers.
5. Crude awaits news from Alaska
Oil prices edged lower Friday, with traders cautious on how an upcoming meeting between U.S. and Russian leaders in Alaska will affect global supply.
At 03:05 ET, Brent futures slipped 0.6% to $66.44 a barrel, and U.S. West Texas Intermediate crude futures fell 0.6% to $63.54 a barrel.
Both contracts jumped nearly 2% on Thursday, but were still headed for a flat weekly end.
All eyes are on Friday’s meeting of Trump and Russian leader Vladimir Putin where a ceasefire in the Ukraine war is at the top of the agenda. A continued conflict between Russia and Ukraine supports oil markets by limiting the supply of Russian oil.
(Reuters contributed reporting.)