Futures ease slightly ahead of last trading session of January, S&P fronts worst month since March 2020
Traders work on the floor of the New York Stock Exchange at the opening bell on January 25, 2022.
TIMOTHY A. CLARY | AFP | beautiful pictures
Futures fell slightly in overnight trading on Sunday as investors braced for the last trading day of what could be the worst month for the S&P 500 since March 2020.
The Dow fell about 70 points. S&P 500 futures fell 0.25% and Nasdaq 100 futures fell 0.35%.
January turned out to be a dismal month for stocks. The S&P 500 is on track for its worst month since the pandemic-fueled market turmoil of March 2020 as investors worry about inflation, supply chain issues and a rally in interest rates. upcoming rates from the Federal Reserve.
The 500-stock average is nearing a correction, down more than 8% from its intraday high earlier this month. The S&P 500 fell 7% in January.
The Dow Jones Industrial Average is also heading for its worst January since March 2020. The Dow is down 4.4% this month.
The Nasdaq Composite, down nearly 15% from its November closing record, is topping out as its worst month since October 2008 and its worst first month of all time. The tech-focused average fell 12% in January.
Plus, the small-cap benchmark Russell 2000 is in a bear market.
Last week, the Federal Reserve shown that it is likely to raise interest rates for the first time in more than three years to combat historically high inflation. The market is currently pricing in five rate hikes of 1/4 percentage point in 2022.
The major averages experienced wild swings last week, with the Dow moving gutted 1,000 points in both directions. The Dow ended the week 1.3% higher. The S&P 500 was up 0.8 percent last week and the Nasdaq was mostly flat for the week.
“All of these lead to additional market volatility until investors understand this transition period,” said Michael Arone, chief investment strategist at State Street Global Advisors. “On the other hand, the economy will continue to expand, income will be quite good. That is enough to sustain the market, but I think they are adjusting to changes in monetary policy, fiscal policy. and income.”
Earnings season continues this week with key reports from Alphabet, Starbucks, Meta Platforms, Amazon and more. About a third of S&P 500 companies reported fourth-quarter earnings, and 77% beat Wall Street earnings expectations, according to FactSet.
“Mainly, this week will hinge on whether the corrective low is already in or whether last Monday’s low is challenged and broken,” said Jim Paulsen, investment strategist at Leuthold Group. break or not,” said Jim Paulsen, investment strategist at Leuthold Group. “The longer the S&P sustains last Monday’s lows or even moves further to the upside, the more that calm will return and fundamentals could start to dominate sentiment in the near future. market promotion.”
There are also important economic data this week, the most important of which is the Friday jobs report in January.
— Patti Domm of CNBC contributed to this report.
