Dow Futures Slide, Oil Prices Fall With Earnings Ahead—and What Else Is Happening in the Stock Market Today

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Federal Reserve Chair Jerome Powell said last week that taming inflation was “essential.”

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Win McNamee/Getty Images

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Stocks were falling on Monday, extending declines from Friday as investor attention remained on Federal Reserve policy and US corporate earnings.

Futures for the Dow Jones Industrial Average retreated 250 points, or 0.7%, after the index tumbled 981 points on Friday to close at 33,811. S&P 500 futures signaled a start 0.8% into the red with the Nasdaq poised to fall 0.6%; the S&P 500 and Nasdaq dropped 2.8% and 2.6% on Friday, respectively.

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Overseas, the pan-European Stoxx 600 was 1.5% lower and Tokyo’s Nikkei 225 lost 1.9%.

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Stocks remain under pressure from expectations of an aggressive shift in monetary policy in the US, where the Federal Reserve is expected to raised interest rates many times this year and next as it fights historically high inflation.

“While sustained inflation and a more aggressive Fed pose a risk to the economy and financial markets, a US recession in the next 12 months is not in our base case,” said Mark Haefele, the chief investment officer at UBS Global Wealth Management. “We stay invested and tilt our positioning toward areas of the market that can perform well in an environment of high inflation, rising rates, and elevated volatility.”

US corporate earnings are also in focus, with 179 of the 500 constituents of the S&P 500 reporting corporate earnings this week. The day ahead will see results from Activision Blizzard (ticker: ATVI), PepsiCo (PEP), and others.

“US earnings season accelerates this week and the results for Q1 should have a very binary impact on the markets. Weak results equal bad, superior results equal relief rally,” said Jeffrey Halley, an analyst at broker Oanda. “Heavyweights such as Citigroup (C), McDonald’s (MCD), and Visa (V) announce this week, but the street will be focused on the FAANG titans [of Big Tech],

Oil prices fell back amid concerns around Covid-19 lockdowns in China being extended and spread, which could weigh on global consumption. But crude markets remain incredibly tight, as they have been since the Russian invasion of Ukraine in February and the wave of associated sanctions on Russia.

Futures for US benchmark West Texas Intermediate crude fell near 5% to below $97.50 a barrel.

“There is little doubt that concerns about falling demand in China is hitting traders’ sentiment, coupled with an expected slowdown in the US,” said Susannah Streeter, an analyst at broker Hargreaves Lansdown,
“However the price is set to stay volatile given the brutal ongoing battles in Ukraine are adding to the spring tides of worry.”

Write to Jack Denton at [email protected]

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Credit: www.marketwatch.com /

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