Stock futures fell on Monday after the S&P 500 posted its biggest weekly gain in nearly five months on easing inflation data.
Dow Jones Industrial Average futures are down 88 points, or 0.3%. S&P 500 futures were down 0.4% and Nasdaq 100 futures were down 0.7%.
The S&P 500 rose 5.9% last week, its best week since June. Investors welcomed the lighter-than-expected inflation rate, betting the Federal Reserve would soon slow down its aggressive tightening campaign.
“There’s been a marked shift in the market, with investors increasingly willing to take risks across asset classes,” said Mark Hackett, head of investment research at Nationwide. “Technical indicators have improved dramatically, with investor sentiment, momentum, range and risk factors all showing marked improvements.”
The technology-rich Nasdaq Composite rose 8.1% last week, its best week since March, while the blue chip Dow gained 4.2%.
The Cboe volatility index, known as the Wall Street Fear Index or VIX, fell one point to 22.5, its lowest level since August. The VIX, which tracks his 30-day implied volatility of the S&P 500, was trading above the 30-point threshold for much of October.
Still, the Federal Reserve has shown little indication that it may deviate from its tightening trajectory any time soon. Fed President Christopher Waller said Sunday that “we’re at a point where we can start thinking about slowing down.” But “we are not softening. …Stop paying attention to the pace and start paying attention to where the endpoint is. Until inflation subsides, that endpoint is still there.”
Investors also digested the news on the political frontier over the weekend. Democrats will retain control of the Senate in the 2022 midterm elections, NBC News predicts. The party will retain at least 50 seats after Senators Mark Kelly of Arizona and Catherine Cortez Masto of Nevada postpone their challenges.
Meanwhile, the third quarter earnings season is set to continue, with a focus on retail. Tyson Foods will report results before Monday’s bell. His Walmart, Home Depot, Target, Lowe’s, Macy’s, and Kohl’s, major retailers, are all set to release figures this week.