U.S. stock futures were mostly flat on Monday as traders eyed inflation data and the Fed’s decision could set trends for the rest of the year.
How to trade stock index futures?
-
S&P 500 Futures Contract
ES00,
+0.10% down only 2 points, or less than 0.1%, to 3934
-
Dow Jones Industrial Average Futures
YM00,
+0.05% down 26 points, or 0.1%, to 33715
-
Nasdaq 100 futures
NQ00,
+0.12% up 3 points, or less than 0.1%, to 11686
On Friday, the Dow Jones Industrial Average
DIA,
down 305 points, or 0.9%, to 33476, S&P 500
SPX,
down 29 points, or 0.73%, to 3934 and the Nasdaq Composite
COMPUTER,
fell 77 points, or 0.7%, to 11005.
What is driving the market?
Equity index futures have struggled to gain traction at the start of the week where inflation and the monetary authorities’ anti-inflationary campaigns will be at the forefront.
The caution follows poor performance over the past few sessions as investors continue to worry about higher borrowing costs and their impact on the economy and corporate earnings.
The S&P 500 is up 10% from its 2022 low but is still down 17.5% year-to-date as the Federal Reserve raised interest rates by 375 basis points since March.
“The recovery in global risk appetite faltered last week, especially in the US, where the major indexes suffered their biggest declines since September. Ian Williams, strategist at Peel Hunt, said: know this week’s agenda is packed with major macro updates that will test sentiment further.
Most important will be U.S. consumer price data on Tuesday, followed by a day later the Federal Reserve’s rate decision, when the central bank is expected to raise interest rates by 50 percent. basis points to 4.25% to 4.50%.
The stock market bulls will be hoping that inflation may show signs of cooling further, helping the Fed move into a less aggressive tightening cycle. However, some analysts warned that after last week’s report that producer prices were hotter than expected, there was a risk that investors could be left out by a higher-than-expected consumer price index.
“Because of the relatively low consensus numbers, we may have another PPI-like disappointment on Friday with the US CPI release tomorrow, which could further fuel the hawkish view. of the Federal Reserve (Fed) ahead of the FOMC decision on Wednesday, boosting the US dollar, driving US yields higher and stock prices lower,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank said.
Traders also have interest rate announcements from the European Central Bank and the Bank of England to watch out for, both of which will be released on Thursday. UK inflation data, with the annual rate currently at a 40-year high of 11.1%, will be released the day before. Euro
EURUSD,
and weigh
GBPUSD,
little changed on Monday at $1.2254 and $1.0540, respectively.
U.S. economic updates to be released on Monday include the New York Fed’s 1- and 5-year inflation expectations for November, at 11 a.m. PT. The federal budget for November will be released at 2 p.m. Eastern time.
