Traders on the floor of the New York Stock Exchange.
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Stock futures were lower on Sunday night as markets emerged from a tumultuous week and traders looked ahead to key reports coming next week that could provide insight into the health of the economy.
Futures linked to the Dow Jones Industrial Average fell 0.6% to 29,175 points. S&P 500 futures fell 0.7% to 3,626.25, while Nasdaq 100 futures fell 0.8% to 11,014.25.
Market watchers generally see next week as the start of earnings season, with four of the world’s biggest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi – reporting on Friday. PepsiCo, Delta and Domino’s are also among the companies reporting next week.
Inflation will also take center stage as new monthly consumer price index data arrives on Thursday morning.
After a week of whiplash for market participants. The first half sparked a relief rally that pushed the S&P 500 up more than 5% in its biggest two-day gain since 2020.
But jobs data that economists say will keep the Federal Reserve on track to continue raising interest rates and OPEC+’s decision to cut oil supply rattled investors, diluting gains later the week. When daily trading ended on Friday, the S&P was up 1.5% compared to where it started the week. The Dow and Nasdaq rose 1.5% and 0.7%, respectively.
Still, the Dow, S&P 500 and Nasdaq had their first positive week in the last four. However, everything remains substantially down so far in 2022, and the Nasdaq is less than 1% off its 52-week low.
Meanwhile, the 2-year Treasury yield rose 6 basis points to close at 4.316%. One basis point equals 0.01%.
“Stock market direction is likely to be lower because the economy and business profits will slow significantly or the Fed will have to raise rates even more and keep them higher for longer,” said Chris Zaccarelli , head of investments. official at the Independent Advisor Alliance, Friday.
“Given the conditions we’re operating in, we think it’s prudent to start preparing for a recession,” he added. “The talk of a shallow recession that is now the narrative of the day seems eerily similar to the ‘inflation is temporary’ narrative of last year.”
Concerns that corporate earnings are showing the ugly side of a rising dollar rose last week as Levi Strauss became the latest to cut guidance due to falling international sales.