Equity futures traded lower Monday morning as investors braced for a week of major corporate earnings and a possible rate hike by the Federal Reserve.
Futures tracking the Dow Jones Industrial Average fell 178 points, or about 0.52%. S&P 500 futures were down 0.76% and Nasdaq 100 futures were down 1.1%.
Wall Street is having a strong week as the stock market’s January rally continues. The Nasdaq Composite is up 4.3% in his week, while the S&P 500 and Dow are up 2.5% and 1.8% respectively.
We have some testing this week for this 2023 rally. A busy stretch of corporate earnings season includes reports from McDonald’s and General Motors on Tuesday, followed by tech giants Apple, Metaplatform, Amazon and Alphabet later in the week.
The Federal Open Market Committee will meet on Tuesday and Wednesday, and the Fed is expected to raise rates by a quarter of a percentage point. Investors are looking for clues about how much the central bank will raise interest rates in its fight against inflation.
“Inflation has shocked the Fed. We need to be careful not to cut rates too early. Don’t agree with this gobbledygook that several rate cuts are priced in for December. The Fed can help in the highly unlikely event of a crash landing,” David Zervos, chief market strategist at Jefferies, said in a note to clients.