US stock futures rose slightly ahead of overnight trade on Monday after stocks extended a sharp sell-off that sent all three major indexes to their lowest level in a year to date.
S&P 500-related futures rose 0.3% after the benchmark closed below 4,000 for the first time since March 2021, deepening losses from the longest series of weekly declines since 2011. Contracts on the Dow rose 0.2% after erasing the index. With more than 650 points. In the main session, Nasdaq futures were up 0.3%, rebounding from a 4.3% decline in previous trading.
Meanwhile, the benchmark 10-year Treasury yield was above 3%, the highest since the end of 2018, and the CBOE Volatility Index (VIX), Wall Street’s “fear gauge”, jumped above 34, well above the long-term. . On average, about 20.
These moves are extending the recent period of turmoil in stock markets as concerns about inflation, higher interest rates and the potential for an economic slowdown continue to weigh on investor sentiment.
“The market is clear of major positive catalysts at the moment, so it is no surprise that we are starting the week under pressure,” said Brian Price, head of investment management at Commonwealth Financial Network, in an email note.
Adding to the headwinds is a lackluster earnings season that has raised concerns about how corporate profits will turn out amid ongoing macroeconomic turmoil. As of Friday, the percentage of S&P 500 companies that beat EPS estimates were above the five-year average, but the volume of upside surprises was below the five-year average, according to data from FactSet.
“Another catalyst that could be causing some risk aversion lately is a somewhat disappointing earnings season,” Price added. “It certainly hasn’t been as strong as the past few quarters and there is more uncertainty surrounding our EPS outlook given the sheer amount of overall uncertainty.”
For this earnings season so far, 87% of companies in the S&P 500 have reported actual first-quarter year-to-date results as of Friday, according to the latest available FactSet data. Investors are looking forward to more major reports underway this week from major names including Disney (DIS), Peloton (PTON) and Rivian Automotive (RIVN).
On the economic data front, traders will be watching the Consumer Price Index (CPI) on Wednesday closely for the latest snapshot of the state of inflation in the US. The figure is expected to provide clues on how aggressively the Federal Reserve will need to act to mitigate price hikes.
“The stock market continues to struggle when the effects of inflation and rising market interest rates on stock prices are factored in,” John Lynch, chief investment officer at Comerica Wealth Management, said in a note on Monday.
“This is a tightrope move by the Fed. If it moves too slowly, it risks unchecking inflation and embedding high inflation expectations – making it even more difficult to eradicate,” Lynch noted. “Conversely, if the Fed raises interest rates too quickly, it risks tipping the economy into recession, with job losses and other associated costs. The Fed already has a difficult task ahead.”
6:14pm ET Monday: Stock futures rise after the S&P 500 closes below 4000
Here is where the stock futures were in after-market trading on Monday evening:
S&P 500 futures contractsES = F.): +10.50 (+0.26%) to 3998.00
Dow futures contractsYM = F.): +78.00 (+0.24%) to 3,998.00
Nasdaq futures contractsNQ = F.): +42.00 (+0.34%) to 12235.75
raw (CL = F.):- $0.30 (-0.29%) to $102.79
He went (GC = F.): – $5.30 (-0.29%) to $1,853.30 per ounce
Treasury for 10 years (^ degeneration): -4.4 basis points to produce 3.0790%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed
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