Traders on the floor of the NYSE
Source: NYSE
U.S. stock futures fell Monday night following a week during which higher interest rates kept investor sentiment in check.
Dow Jones Industrial Average futures dipped 102 points, or 0.3%. S&P 500 futures also dipped 0.3%, and Nasdaq-100 futures pulled back by 0.1%. U.S. markets were closed Monday due to the Presidents Day holiday.
The Dow fell 0.1% last week, marking its third straight weekly decline. The S&P 500 slid for a second consecutive week, losing 0.3%. The tech-heavy Nasdaq Composite bucked the trend, rising 0.6%.
Those moves came as traders grappled with hotter-than-expected inflation data, which pushed Treasury yields to levels not seen since November. Traders are worried that stubborn inflation will lead the Federal Reserve to keep rates higher for longer — which could tip the economy into a recession.
“We believe a recession is virtually inevitable, but we do not believe it will begin until sometime between the beginning and the middle of 2024,” Doug Peta, chief U.S. investment strategist at BCA Research, said in a note. “Such a delay would give equities a window to rally.”
The Fed on Wednesday is scheduled to release the minutes from its meeting of Jan. 31 and Feb. 1. The central bank hiked rates by 25 basis points after that meeting.
Traders will also parse through corporate earnings from retail giants Walmart and Home Depot to gauge how the consumer is doing.
2 HOURS AGO
Walmart, Home Depot slated to report earnings
Retail giants Walmart and Home Depot are slated to report earnings Tuesday, and they could give investors some insight on how well the consumer is doing. Both companies are scheduled to post their latest quarterly results before the bell.
Home Depot’s earnings have beaten expectations for 10 straight quarters, FactSet data shows. Walmart, meanwhile, has outpaced analyst forecasts in eight of the last 10 quarters.
Walmart and Home Depot have lagged the broader market to start 2023. Walmart’s stock is up just 3.3% year to date, while Home Depot has advanced just 0.7%. The S&P 500 has climbed more than 6% in that time.
2 HOURS AGO
Traders look ahead to Fed minutes
The Federal Reserve’s release of it’s Jan. 31-Feb. 1 meeting minutes could be a market-moving event this week, as traders continue to search for clues on the central bank’s next policy moves.
The minutes are slated for release Wednesday at 2 p.m. At that meeting, the central bank hiked rates by 25 basis points and noted it expects “ongoing” increases.
Last week, St. Louis Fed President James Bullard said a 50 basis point rate hike can’t be ruled out at the next meeting. He also said he advocated for such a rate increase at the most-recent meeting.
— Fred Imbert
2 HOURS AGO
Tech stocks seeing lots of short covering, Goldman Sachs says
Many of the traders who were short tech are unwinding those positions, Goldman Sachs said.
Strategists at the bank noted that, over the past 12 trading day, buying on U.S. tech names has been mainly driven by short covering “and to a much lesser extent long buys.”
“In cumulative notional terms, the short covering in US Tech stocks from Jan 31st to Feb 15th is the second largest in magnitude over any 12-day period in the past decade and ranks in the 99.5th percentile,” Goldman said.
— Fred Imbert, Michael Bloom
3 HOURS AGO
Stock futures open lower
U.S. stock futures got off to a rough start Monday night. Dow and S&P 500 futures lost 0.3% and 0.2%, respectively. Nasdaq-100 futures also dipped 0.2%.
— Fred Imbert