US stock futures pointed to a lower open on Monday morning as investors awaited the start of corporate earnings season this week and a slew of new economic data as the Federal Reserve gears up. to speed up their moves to counter inflation.
S&P 500 contracts declined and added to last week’s losses. Nasdaq futures fell as tech stocks came under renewed pressure. Treasury yields rose, with the benchmark 10-year yield topping 2.7% to hit the highest level since January 2019.
Concerns about inflation, rising commodity prices amid Russia’s war in Ukraine and the Federal Reserve’s monetary policy path remained at the center of investors’ attention. On Tuesday, merchants will receive the latest consumer price index from the Bureau of Labor Statistics, which is expected to show a staggering 8.4% year-over-year increase in prices, the biggest jump since 1982. And this comes as Fed officials have increasingly talked of interest rate hikes of 50 basis points higher than average this year to help push prices down. Minutes from the Fed’s March meeting last week also showed that the central bank was preparing to start withdrawing assets from its $9 trillion balance sheet, in a further move that removes financial market support and moves away. of the accommodative policies of the pandemic era.
“If you think about recent cycles that are comparable, I think about 2018, 2019, the Fed was raising interest rates and liquidating their balance sheet. That should sound very familiar,” Seth Carpenter, chief global economist at Morgan Stanley, told Yahoo. Finance on Friday. “But at the end of 2018, the risk markets started to crack and the Fed changed course very quickly.”
“The key difference now between those two episodes is that they are trying to reduce inflation. They are not trying to stop it from rising,” he added. “So what that means is that they are trying to slow down the American economy. They are trying to slow growth so much that inflation pressures subside, but not enough to send us into a recession. And that’s complicated.”
Meanwhile, the start of the latest quarterly corporate earnings season this week will help show how individual companies have navigated inflationary pressures and the specter of slowing economic growth. As of Friday, Wall Street analysts had expected S&P 500 earnings to grow 4.5% in the first quarter from a year ago, according to data from FactSet. If realized, this would mark the slowest rate since the fourth quarter of 2020.
“Management guidance and comments will be particularly important sources of information this quarter given the uncertainty of future earnings,” David Kostin, chief US equity strategist at Goldman Sachs, wrote in a note Monday. “Consistent with previous quarters, guidance has recently been a key differentiator of stock performance.”
7:13 a.m. ET: Twitter shares drop after Musk decides not to join board
Shares of Twitter (TWTR) fell on Monday morning, giving back some of last week’s gains after Tesla CEO Elon Musk opted not to join the social media company’s board of directors after take a stake of more than 9%.
“Elon’s appointment to the board would officially become effective on April 9, but Elon shared earlier that morning that he will no longer be joining the board. I think this is for the best,” said Twitter CEO Parag Agrawal. he said in a tweet on Monday. “We value and will always value input from our shareholders, whether they are on our Board or not. Elon is our largest shareholder and we will remain open to their input.”
“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal added. “The decisions we make and how we execute them are in our hands, no one else’s.”
7:07 a.m. ET Monday: Stock futures headed for a lower open
Here is where the markets were trading Monday morning before the opening bell:
S&P 500 Futures (EN=F): -15 points (-0.33%) at 4,468.50
dow futures (YM=F): -24 points (-0.07%) to 34,589.00
Nasdaq futures (NQ=F): -106.5 points (-0.74%) at 14,220.50
Crude (CL=F): -$2.49 (-2.53%) at $95.77 a barrel
Prayed (GC=F): +$16.00 (+0.82%) at $1,961.60 per ounce
10-year Treasury (^TNX): +4.2 bps for 2.757% throughput
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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