Traders take action on the last day of annual trading on the New York Stock Exchange on December 31, 2024 in New York City.
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Stock index futures were little changed on Sunday as investors looked ahead to a data-heavy week that includes December U.S. inflation and major bank earnings reports.
Futures and Dow Jones Industrial Average Up 60 points, or 0.1%. S&P 500 Index Futures rose slightly by 0.01%, while Nasdaq 100 Futures Add 0.04%.
Investors will get a clearer picture of the state of the economy this week after last week’s blowout jobs report sent stocks tumbling. The stronger-than-expected non-farm payrolls report raised concerns that the Federal Reserve will proceed with caution, raising questions about further rate cuts.
Investors will also be carefully watching the start of fourth-quarter earnings season, with banks including Citigroup, Goldman Sachs and JPMorgan Chase reported Wednesday. Morgan Stanley and Bank of America Results will be announced on Thursday.
The 30-stock Dow Jones and S&P 500 were down 1.9% for the week, and the Nasdaq fell 2.3%, marking a second consecutive weekly decline for all three indexes.
“With current inflation and inflation expectations becoming elevated and sticky, and bond yields rising sharply and rapidly, equity investors are starting to become more cautious,” said Katherine Nixon, chief investment officer at Northern Trust Wealth Management. “In a typical ‘Too much of a good thing’ scenario, constructive growth backdrop is leading to higher rate forecasts for longer.”
Traders currently believe that the probability that the central bank will keep interest rates unchanged at the January 29 meeting is more than 97%, and the probability that the Federal Reserve will keep interest rates unchanged again in March is close to 75%. CME Group’s Federal Reserve Watch tool.
Data this week includes the December Consumer Price Index on Wednesday morning. Ahead of that, investors will look to the December Producer Price Index report on Tuesday to unpack wholesale inflation. On Tuesday, Wall Street was also awaiting comments from Kansas City Fed President Jeffrey Schmid and New York Fed President John Williams.
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