U.S. Stock Futures Hold Steady as Investors Await Economic Data
U.S. stock futures mostly held around the flatline on Monday, as investors geared up for a week of key economic data releases and a slew of quarterly corporate earnings. The benchmark closed above 5,000 for the first time ever to end the prior trading week thanks in part to a surge in megacap groups like Microsoft and Amazon.com. Artificial intelligence chipmaker Nvidia also jumped to a record high following a Reuters report that it was building a new division that will aim to provide bespoke chips for cloud computing businesses and others.
On Friday, the tech-heavy added 1.3% and the blue-chip dipped by 0.1%. All of the main indices on Wall Street posted their fifth consecutive winning week.
Investors will have the chance to parse through several speeches from Federal Reserve policymakers on Monday that could provide more insight into the path ahead for interest rates. Hopes are rapidly fading that the Fed could slash rates as soon as its March meeting, particularly after Chair Jerome Powell said last month that inflation is still running above the central bank’s 2% target. Powell later reiterated this stance, saying the U.S. economy seems to be on course for a so-called “soft landing,” a scenario in which the Fed successfully cools inflation without sparking an economic meltdown and steep job losses. However, Powell noted, the Fed must now find a way to balance the twin risks “moving too soon…or too late.” He added that rate-setters will be keeping a close eye on upcoming data to confirm that inflation is continuing to ease.
The comment amplifies the importance of Tuesday’s publication of the U.S. consumer price index for January, which is expected to show that headline price growth in the world’s largest economy slowed on both an annual and monthly basis.
A slew of corporate earnings is also due out this week, with more than 60 firms in the S&P 500 set to unveil quarterly results. Some of these names, including Coca-Cola, Shopify and Kraft Heinz, may provide some insight into the health of the U.S. consumer. Analysts will be keen as well to sift through second-quarter figures from Cisco Systems, which is pushing to capitalize on the AI boom. Cryptocurrency exchange Coinbase will also post its fourth-quarter numbers following a recent spike in volatility in the market for digital coins.
Elsewhere, oil prices fell in European trade as traders locked in some profits after stellar gains over the prior week. Both contracts rose about 5% to 6% in the past week, supported in part by Israel rejecting a ceasefire proposal from Hamas and continuing deadly air strikes on the Gaza Strip. The move pointed to little de-escalation in the conflict, which, along with attacks by Iran-aligned Houthis in the Red Sea, have spurred on concerns over disruptions in global oil supplies.
Analyst comment
Positive news:
– U.S. stock futures mostly holding steady
– Benchmark closed above 5,000 for the first time
– Tech-heavy index rose 1.3%
– Main indices on Wall Street posted fifth consecutive winning week
Neutral news:
– Speeches from Federal Reserve policymakers could provide insight into interest rates
– Fed is not expected to slash rates in March
– U.S. consumer price index for January expected to show slowed price growth
– A slew of corporate earnings to be released
Negative news:
– Oil prices fell in European trade
As an analyst, I predict that the market will likely continue its steady performance with some volatility due to the anticipation of economic data releases and corporate earnings. The Fed’s stance on interest rates and inflation will also be closely monitored. Oil prices may experience further fluctuations due to ongoing geopolitical tensions.
