Stock futures were lower on Monday morning as investors braced for a week ahead of key corporate earnings and Federal Reserve interest rate hikes.
Futures for the Dow Jones industrial average fell 178 points, or about 0.52%. S&P 500 futures fell 0.76%, while Nasdaq 100 futures fell 1.1%.
Wall Street is coming off a successful week as the stock market’s January rally continues. The Nasdaq Composite gained 4.3% for the week, while the S&P 500 and Dow added 2.5% and 1.8%, respectively.
There are many tests this week for this 2023 rally. A busy stretch of the corporate earnings season included reports from McDonald’s and General Motors on Tuesday, followed by tech giants Apple, MetaPlatforms, Amazon and Alphabet later in the week.
The Federal Open Market Committee meets on Tuesday and Wednesday, when the central bank is expected to raise rates by a quarter of a percentage point. Investors will be looking for clues about how much higher the central bank will raise rates in the fight against inflation.
“Inflation has shocked the Fed to the upside; they should be careful not to inadvertently cut rates too early. Don’t buy into this frenzy about a couple of rate cuts priced in for December. For now, help in the unlikely event the Fed makes a crash landing,” said David Zervos, chief market strategist at Jefferies. said in a note to clients.