Dow futures drop 200 points as Fed decision, tech earnings await
U.S. stock futures tumbled on Monday to kick off an important week with the Federal Reserve’s interest rate decision, jobs report and some key tech sector earnings.
What is happening
Dow Jones Industrial Average Futures
fell 204 points, or 0.6%, to 33842.
S&P 500 Futures Contract
down 36 points, or 0.9%, to 4048.
Nasdaq 100 futures
fell 153.75 points, or 1.3%, to 12069.
On Friday, the Dow Jones Industrial Average
up 29 points, or 0.08%, to 33978, S&P 500
up 10 points, or 0.25%, to 4071 and Nasdaq Composite
up 109 points, or 0.95%, to 11622.
The S&P 500 is up more than 6% this year and more risky games like the ARK Innovation ETF
doing even better, with Cathie Wood’s flagship fund growing 29% in 2023.
What is driving the market?
It’s been an important week for both corporate earnings and macroeconomic data, with the Federal Reserve’s interest rate decision on Wednesday and nonfarm payrolls due on Friday.
Over the weekend, The Wall Street Journal focused on Fed staffers’ views on inflation, and in particular their concerns that work connection will still not workThis suggests that price pressures may persist despite recent data showing a sharp drop in commodity inflation.
Seth Carpenter, head of global economics at Morgan Stanley, told clients in a note this weekend that he doesn’t share those worries. Due to the concentration of the market, there are higher profit margins, and therefore more likely to let margins shrink after wages rise. Combined with a lower unionization rate than it was in the 1980s, “all available information simply indicates that there is a low probability that wage inflation is now a serious problem — even with services.”
Apple technology giant
highlights a massive corporate earnings sheet this week. In particular, technology stocks have rallied this month as bond yields eased.