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U.S. stock futures slumped on Monday to kick off a big week that features a Federal Reserve interest-rate decision, a jobs report and several key technology-sector earnings.
What’s happening
-
Dow Jones Industrial Average futures
YM00,
-0.69%
fell 204 points, or 0.6%, to 33842. -
S&P 500 futures
ES00,
-0.95%
dropped 36 points, or 0.9%, to 4048. -
Nasdaq 100 futures
NQ00,
-1.29%
decreased 153.75 points, or 1.3%, to 12069.
On Friday, the Dow Jones Industrial Average
DJIA,
rose 29 points, or 0.08%, to 33978, the S&P 500
SPX,
increased 10 points, or 0.25%, to 4071, and the Nasdaq Composite
COMP,
gained 109 points, or 0.95%, to 11622.
The S&P 500 has pushed 6% higher this year, and riskier plays such as the ARK Innovation ETF
ARKK,
have done even better, with Cathie Wood’s flagship fund up 29% in 2023.
What’s driving markets
It’s a big week for both corporate earnings and macroeconomic data, with the Federal Reserve interest rate decision coming Wednesday and nonfarm payrolls set for release on Friday.
Over the weekend, The Wall Street Journal focused on Fed staffers’ view of inflation, and in particular their worries that job-matching will remain inefficient, which suggests price pressures could persist despite recent data showing a sharp decline in goods inflation.
Seth Carpenter, chief global economist at Morgan Stanley, told clients in a note this weekend that he doesn’t share those worries. Because of market concentration, there are higher profit margins, and therefore more room to let margins shrink after wage upswings. Combined with lower unionization rates compared to the 1980s, “all the information at hand simply points to a low probability that current wage inflation is a critical issue — even with services.”
Tech giants Apple
AAPL,
Alphabet
GOOGL,
and Amazon
AMZN,
highlight a huge slate of corporate earnings this week. Tech stocks in particular have rallied this month as bond yields have eased.
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