US pre-open: Stocks seen slightly lower as Fed speak remains in focus

US futures pointed to a modestly weaker open on Wall Street on Monday amid declining oil prices, as investors looked for further clues on the timing of the next rate hike by the Federal Reserve.

At 1130, Dow Jones Industrial Average and S&P 500 futures were down 0.2%, while Nasdaq futures were off 0.1%.

At the same time, oil prices retreated amid ongoing supply glut concerns after Iran said it had no plans to freeze production. West Texas Intermediate was down 1.1% to $47.86 a barrel and Brent crude was 1% lower at $48.24.

On Friday, data from oil-field services company Baker Hughes showed the number of rigs drilling for oil in the US was unchanged last week.

Overall sentiment was weighed by data released earlier showing Japanese exports fell 10.1% on the year in April, in line with forecasts but a much weaker performance than March’s 6.8% drop. Imports slumped 23%, missing expectations for a 19% decline.

Investors were also busy digesting comments from St Louis Federal Reserve President James Bullard, who said in a speech in Beijing that a tight labour market in the US could put pressure on inflation, in turn underpinning the argument for higher interest rates.

Market participants will eye speeches from Fed Reserve Bank of San Francisco President John Williams and Philadelphia Fed President Patrick Harker later in the day for further clues.

“With market sensitivity to anything US interest rate-relatively now picking up, today’s speeches from three Fed officials could be important,” said Craig Erlam, senior market analyst at Oanda.

“If the message is consistent with those towards the end of last week and the April minutes, investors would be foolish to ignore them. That said, there’s one person’s view that will stand out above all others this week and that is Fed Chair Janet Yellen, whose opinion we should get this Friday. Should Yellen hint at a June or July hike then I think markets will reluctantly accept defeat.”

In corporate news, Monsanto shares surged 9% in pre-market trade after German drugs company Bayer made a $62bn bid for the US agriculture group.

On the macroeconomic calendar, Markit PMI manufacturing is at 1445 BST.