US pre-open: Stocks seen slightly lower as investors mull rate hike

US futures pointed to a marginally weaker open on Wall Street on Monday as investors continued to mull over the prospect of a rate hike by the Federal Reserve.

At 1125 GMT, Dow Jones Industrial Average futures were down 0.1%, while S&P 500 and Nasdaq futures were 0.2% lower.

Meanwhile, oil prices retreated, with West Texas Intermediate and Brent crude down 0.6% to $53.00 a barrel and $55.55, respectively.

On Friday, Federal Reserve chair Janet Yellen signalled that another interest rate rise is on the cards later in March.

During a speech in Chicago, Yellen said: “We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.

"Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”

David Morrison, senior market strategist at SpreadCo, said: “On Friday evening Fed Chair Janet Yellen gave the clearest indication yet that the US central bank was ready to tighten monetary policy further.

“Yellen said that the US economy was resilient and had met the Fed’s goals so that a March hike would be appropriate if the economy stayed on track. This seemed to keep a sliver of get-out should this Friday’s Non-Farm Payrolls disappoint. However, it’s unlikely that Fed members would provide such a uniform and united front on monetary policy ahead of a meeting only to turn around and wrong-foot investors on the day itself. The big question now is whether the impending hike gives investors an excuse to book profits after an incredible equity market run, or if it gives further confidence in hopes for a further US economic recovery.”

Market participants were also likely to be keeping an eye on geopolitical developments after North Korea fired four ballistic missiles into the waters off its east coast early on Monday in Seoul time.

In corporate news, shares of General Motors could be active after it said it will sell its European unit, Opel, in a $2.3bn deal.

US-listed shares in Deutsche Bank were also likely to be in focus after it announced plans for a €8bn euro share sale to bolster its capital position.

On the macroeconomic front, factory orders are due at 1500 GMT.