Traders work on the trading floor of the New York Stock Exchange.
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Stock futures were down slightly Sunday night as investors await key inflation data for further clues on the duration of this year’s market rally. Earnings from some major financial giants and consumer companies are also on the agenda.
S&P futures fell 0.1%, while futures linked to the Dow Jones Industrial Average lost 31 points, or nearly 0.1%. Nasdaq 100 futures remained lower.
The S&P 500 is up about 16.7% this year, and the benchmark index just posted its fourth positive week in the past five amid continued optimism that an improving inflation backdrop — and any weak spots in the economy later this year — could lead to a rate cut by the Federal Reserve.
The June consumer price index, due on Thursday, could bolster those hopes if the headline figure shows a slight improvement, as currently expected. Data on the producer price index is due on Friday.
Last week, labor data reflected a mildly cooling labor market, fueling expectations of a rate cut. But while the U.S. economy added more jobs than expected in June, the unemployment rate also unexpectedly rose to 4.1% from 4%. Traders are currently expecting two rate cuts in 2024, with the first in September, according to the CME FedWatch Tool.
“This [June jobs report] “The coming inflation numbers will be key to determining the timing of the first rate cut…signs of continued moderation in economic growth and the labor market are likely to be positive for equities and high yield bonds, at least in the near term,” said Greg Wilensky, head of U.S. bond markets at Janus Henderson Investors.
A number of major banks, including Citigroup and JPMorgan Chase, are kicking off second-quarter earnings season this week. PepsiCo and Delta Air Lines are also scheduled to report results.
Stocks are coming off a strong week as the S&P 500 and Nasdaq Composite hit record highs and closed at record levels on Friday, with the broad market index marking its 34th record close in 2024. The S&P 500 rose about 0.5% over the day’s session, while the Nasdaq gained 0.9% as shares of Tesla and Nvidia rose. The 30-stock Dow rose 0.17%, or 67.87 points, to also end the week in the green.