US stock index futures were little changed in overnight trade on Monday after the major averages started the week in the red on sentiment Covid omicron worries.
Futures contracts tied to the Dow Jones Industrial Average rose 45 points. S&P 500 futures were up 0.11%, while Nasdaq 100 futures were 0.08% higher.
During normal trading, the Dow fell 0.89%, or 320 points, while the S&P 500 fell 0.9%. The Nasdaq Composite fell 1.39% as investors pivoted away from overvalued tech stocks.
Shares of airlines and cruise line operators fell amid concerns that the omicron variation could slow travel.
While stocks fell broadly on Monday, bull areas of the market underperformed. The growth iShares Russell 1000 ETF is down 1.22%, while the iShares Russell 1,000 ETF is down 0.45%.
The market will get fresh inflation data on Tuesday when producer price index numbers for November are reported. Economists are expecting it to show prices have risen 0.5% for the month, according to estimates from Dow Jones. This will be a bit slow down compared with a 0.6% increase in October.
The Federal Reserve also begins its two-day meeting on Tuesday. The central bank will release a report on Wednesday with quarterly forecasts for the economy, inflation and interest rates. Chairman Jerome Powell will also hold a press conference.
Investors will closely monitor the surrounding comments if the Federal Reserve plans to accelerate the end of its bond-buying program. Currently, the central bank’s asset purchase program will end in June 2022, but some officials talked about ending purchases earlier.
“So far, the bond market has allowed the Fed to pass on inflation – whether it will continue to do so or not,” said Willie Delwiche, investment strategist at All Star Charts. He added: “The real fireworks coming out of the meeting could be around expectations of a rate hike in 2022.
Despite Monday’s drop in stocks, the S&P 500 is about 1.6% below its all-time high on Nov. 22. The Dow is 2.5% below its all-time high. its mainland, while the Nasdaq Composite is about 5% below its high water mark. The Russell 2000 Index is down more than 11.3% since its November 8 high.
Looking ahead, some strategists, including Ryan Detrick of LPL Financial, believe the stock market is on the upswing.
“We believe pent-up demand, gradually improving supply chain challenges, solid workforce growth and rising productivity will all contribute to a trending year of economic growth.” another in 2022,” he wrote in a note to clients. He added: “The risks associated with COVID-19 remain and the potential for policy mistakes could increase as the economy moves towards normalization, but we think the overall environment will be supportive. business growth and, ultimately, the stock market.”
