Stock futures traded lower on Monday morning as investors braced for a week of key corporate earnings and a possible interest rate hike from the Federal Reserve.
Futures tied to the Dow Jones Industrial Average slipped 178 points, or about 0.52 percent. S&P 500 futures were down 0.76%, and Nasdaq 100 futures were down 1.1%.
Wall Street’s winning week is coming as the stock market’s January rally continues. The Nasdaq Composite gained 4.3% for the week, while the S&P 500 and Dow rose 2.5% and 1.8%, respectively.
There are several tests this week for this 2023 lineup. A busy corporate earnings season includes reports from McDonald’s and General Motors on Tuesday, followed by tech giants Apple, MetaPlatforms, Amazon and Alphabet later in the week.
The Federal Open Market Committee will meet on Tuesday and Wednesday, where the Fed is expected to increase its rate by a quarter of a percentage point. Investors are looking for clues as to how much higher rates the central bank will take in its fight against inflation.
“Inflation has spooked the Fed. They need to be careful not to inadvertently cut inflation too early. Don’t buy into this gobbledygook of a few rate cuts in December. For now, the Fed is just about done. Helping when a crash landing is unlikely,” David Zervos, chief market strategist at Jefferies, said in a note to clients. He said.