Will Jerome Powell Spoil Wall Street's Party? US Stock Futures Slip As Fed Chief Maintains Hawkish Tone Ahead Of More Earnings

U.S. stock futures experienced a dip in Monday’s premarket session as investors brace for an earnings-heavy week. Federal Reserve Chair Jerome Powell, in a “60 Minutes” interview, maintained his hawkish stance, emphasizing the central bank’s cautious approach toward potential rate cuts this year. Amid escalating uncertainty regarding the direction of interest rates, traders may exercise restraint in an overbought market. Additionally, the upcoming influx of earnings reports for the week is likely to introduce caution among traders.

Cues From Previous Week’s Trading:

While Powell’s remarks in the post-meeting press conference spooked traders in the week ending Feb. 2, the market found support from some positive earnings reports, cushioning the downside. The earnings landscape was a mixed bag, with disappointments from Alphabet, Inc. GOOGL GOOG and Apple, Inc. AAPL. However, Amazon, Inc. AMZN and Meta Platforms, Inc. META pleasantly surprised investors.

The Dow Industrials and the S&P 500 indices closed the week at fresh records, while the Nasdaq Composite concluded at a new two-year high.

US Index Performance In Week Ended Feb. 2

Analyst Color:

As the market pushes higher despite the Federal Reserve’s non-committal stance, traders fear a potential drawdown. Carson Group’s Ryan Detrick flagged a historical trend that suggests the upward momentum could be sustained in the near term.

“S&P 500 up >1% four weeks in a row. Since 2000 happened 10 other times,” Detrick said, adding, “Higher two months later 8 times.”

Futures Today

Futures Performance On Thursday

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY fell 0.20% to $493.37 and the Invesco QQQ ETF QQQ gained 0.08% to $428.65, according to Benzinga Pro data.

Upcoming Economic Data:

A slew of Fed speeches, a couple of service sector activity data, the weekly jobless claims data, the Congressional Budget Office briefing on budget and economic outlook due on Wednesday and the Labor Department’s seasonal revisions of consumer price inflation data are among the key Main Street events the market may look up to this week.

S&P Global is scheduled to release its final service sector index for January at 9:45 a.m. ET. A flash estimate released in mid-January showed an increase in the index from 51.4 in December to 52.9 in January.

Chicago Fed President Austan Goolsbee is due to make an appearance on TV at 10 a.m. ET.

The Institute for Supply Management will release its non-manufacturing purchasing managers’ index at 10 a.m. ET. The index is expected to rise from 50.6 in December to 52 in January.

Atlanta Fed President Raphael Bostic is due to make a public appearance at 2 p.m. ET.

The Treasury will auction three- and six-month auctions at 11:30 a.m. ET.

See also: Best Futures Trading Software

Stocks In Focus:

• Caterpillar Inc. CAT rose over 6% in premarket trading following its quarterly results; Air Products and Chemicals, Inc. APD (down about 9%),
• Other companies due to report ahead of the market opening are McDonald’s Corp. MCD, Tyson Foods, Inc. TSN, and ON Semiconductor Corporation ON.
• Notable names reporting results after the close include NXP Semiconductors N.V. NXPI, Rambus Inc. RMBS, Palantir Technologies, Inc. PLTR, Vertex Pharmaceuticals, Inc. VRTX, and J&J Snack Foods Corp. JJSF.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures fell 0.66% to $71.80 in early European session on Monday following a 7.35% pullback last week. The benchmark 10-year Treasury note rose 0.058 percentage points to 4.089% on Monday.

Among global markets, Asian bourses ended mostly lower as soft economic data from China and the U.S. rate uncertainty continued to weigh down. The Japanese and the Taiwanese markets, however, bucked the downtrend.

European stocks are trading mostly higher in late-morning trading on Monday.

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