Fed Speak Ahead: Apollo’s Reported Intel Investment Plan and Market Movers

US stock futures are experiencing fluctuations as traders prepare for new economic data and await comments from Federal Reserve officials following last week’s significant interest rate cut by the central bank. Additionally, asset management firm Apollo Global Management is reportedly proposing a $5 billion investment in chipmaker Intel, while US House Republicans have introduced a new stopgap funding bill amid concerns about a potential government shutdown before the November presidential election.

1. Futures Volatile

US stock futures have been swinging around the flatline as investors anticipate a series of economic reports this week that could influence the Federal Reserve’s monetary policy decisions for the remainder of the year. As of early Monday morning, Dow futures were down 116 points (0.3%), S&P 500 futures fell by 15 points (0.3%), and Nasdaq 100 futures dropped by 63 points (0.3%).

The main indices on Wall Street showed limited movement on Friday after a significant buying spree, following an aggressive interest rate cut from the Fed earlier in the week. Notably, the Dow Jones Industrial Average reached a new record high, driven by a surge in share prices of athletic apparel company Nike after the announcement of Chief Executive John Donahoe’s departure.

2. Upcoming Fed Remarks

Upcoming statements from Federal Reserve officials are expected to provide insights into the recent decision to cut interest rates by 50 basis points. Investors will hear from Atlanta Fed President Raphael Bostic on Monday, followed by Chicago Fed President Austan Goolsbee.

Fed Governor Michelle Bowman, who was the first official to dissent from a Fed decision since 2005, is scheduled to speak on Tuesday and Thursday. Last week, she expressed concerns that the substantial rate cut might signal the wrong message given that inflation is currently above the Fed’s 2% target. Conversely, Fed Governor Christopher Waller advocated for the rate cut to prevent inflation from falling below the target.

Additionally, Fed Chair Jerome Powell is set to speak on Thursday at a major US Treasury Market Conference, alongside New York Fed President John Williams and Vice Chair of Supervision Michael Barr.

3. Apollo’s $5 Billion Proposal for Intel

Apollo Global Management has reportedly made a proposal to invest up to $5 billion in the struggling chip manufacturer Intel. The investment would take the form of an equity-like stake, providing Intel with much-needed financial support as it faces declining sales and a potential cash crunch. The company has already announced cost-cutting measures, including plans to reduce its workforce by as many as 15,000 employees.

Earlier this year, Apollo had also indicated its intention to acquire a 49% interest in a joint venture for Intel’s new production facility in Ireland for $11 billion.

4. House Republicans Introduce Funding Bill

US House Republicans have put forward a plan aimed at keeping the government funded for three months to prevent a partial shutdown. The proposed legislation, which does not include a key immigration measure favored by Republican presidential candidate Donald Trump, is expected to be voted on by the House on Wednesday. The existing discretionary funding of $1.2 trillion is set to expire on September 30.

Failure to pass the funding bill could lead to significant portions of government operations shutting down just weeks before the critical presidential election in November, putting thousands of federal employees at risk of furlough.

House Speaker Mike Johnson emphasized that allowing a government shutdown near such an important vote would be "an act of political malpractice."

5. Oil Prices Rise Amid Middle East Tensions

Crude oil prices remained steady on Monday, supported by concerns that escalating conflicts in the Middle East could disrupt supply from the region. Brent crude rose by 0.2%, reaching $73.81 a barrel, while U.S. crude futures increased by 0.2% to $71.10 per barrel.

Traders are applying a risk premium to oil prices in light of ongoing strikes in Gaza and Lebanon by Israel, amid fears of an all-out war in this crucial oil-producing area. The situation has intensified after Hezbollah threatened retaliation following recent tensions, leading to increased worries about supply disruptions. Crude prices have bounced back over the past two weeks from near three-year lows, largely driven by supply concerns following Hurricane Francine.