Traders on the ground of the NYSE, Oct. 12, 2022.
Source: NYSE
Stock futures were little modified Sunday evening as investors weighed a possible slowdown or pause in Federal Reserve rate of interest hikes and looked ahead to a busy week of earnings.
Futures tied to the Dow Jones Industrial Average were lower by 27 points, or 0.08. S&P 500 futures barely budged and Nasdaq 100 futures also sat near the flat line.
On Friday, the main averages rallied to complete the week after briefly losing the momentum of the January rally. The Nasdaq posted a slight gain for the week. Nonetheless, the Dow and S&P each logged down weeks. All of the main averages remain within the green for the month. The Nasdaq is leading the others with a 6.44% year-to-date gain.
“The markets have gotten increasingly enthused that the bout of high inflation is quickly moving behind us and the period of tight monetary policy is coming to an end,” said Brian Levitt, global market strategist at Invesco. “While the economy will likely still have challenges by the center of the yr, the market is waiting for what is going to likely change into a sustained recovery.”
Investors have been weighing the chance that the Fed is on the point of slow the pace of its inflation-fighting rate hikes after economic data last week showed a decline in wholesale prices and retail sales. They’re also absorbing comments made Friday by Fed Governor Christopher Waller, who said he favors 1 / 4 percentage point rate increase at the subsequent meeting.
Markets have priced in a 99.7% probability of a 25-basis point hike, in line with CME Group data, which might bring the rate of interest to a targeted range of 4.5%-4.75%.
There are not any speeches from Fed officials on the calendar because the central bank will meet the next week, on Jan. 31 and Feb. 1. Nonetheless, investors might be monitoring one other batch of economic data, including the Fed’s preferred inflation measure, the private consumption expenditure price index, due out Friday.
Within the meantime, earnings reports could keep the market on edge, with about 40% of the Dow scheduled to release their latest financial results and provides investors more insight into how firms are weathering inflation and rates of interest. Microsoft, IBM, Tesla, Visa and Mastercard are a few of the big names on deck.
