Apr 8 2024: On Monday, U.S. stock index futures saw a slight dip as investors awaited the release of the latest inflation data and the start of the first-quarter earnings season.
Dow Jones Futures slipped 25 points, or 0.1%, S&P 500 Futures eased 7 points, also 0.1%, and Nasdaq 100 Futures dipped 20 points, mirroring a cautious sentiment among traders.
Despite a robust nonfarm payrolls report last Friday, which exceeded expectations, major Wall Street indices closed higher. However, the overall week witnessed substantial losses as investors recalibrated their expectations regarding potential Federal Reserve interest rate adjustments, possibly as soon as June.
Last week saw the Dow Jones Industrial Average dropping 2.3%, marking its worst performance since March 2023. Similarly, the S&P 500 declined nearly 1%, its largest weekly loss since early January, while the NASDAQ Composite fell 0.8%, marking its fourth negative week in five.
Focus Shifts to March CPI Data
Investor attention has now shifted to the forthcoming release of the consumer price index (CPI) data for March, scheduled for Wednesday. Although there are expectations of a slight cooling in core inflation, the projected annual figure of 3.7%, down from the prior month’s 3.8%, remains significantly above the Federal Reserve’s 2% target.
Fed officials have repeatedly highlighted concerns about persistent inflation, indicating that this could potentially delay any interest rate adjustments.
Additionally, the market is eagerly anticipating insights from the Fed’s March meeting minutes, also set to be released on Wednesday, which could provide further clarity on potential rate cut decisions.
Commencement of Q1 Earnings Season
This week marks the beginning of the first-quarter earnings season, a crucial period that will offer insights into whether major U.S. stocks can justify their recent valuations. With Wall Street indexes showing around a 10% increase so far in 2024, trading close to record highs, market participants are closely watching earnings reports.
Notable earnings announcements expected this week include reports from major U.S. lenders such as JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) on Friday. Additionally, Delta Air Lines (NYSE:DAL) and asset manager BlackRock (NYSE:BLK) are also scheduled to provide updates on their quarterly performance.
Oil Prices Retreat Amid Easing Geopolitical Tensions
In the commodities sector, oil prices witnessed a sharp decline on Monday as hopes of a ceasefire in the Israel-Hamas conflict gained traction. This development has eased concerns about potential disruptions in oil supply from the Middle East.
U.S. crude futures were down 0.8% at $86.25 a barrel, while the Brent contract dropped 0.8% to $90.48 per barrel, reversing their recent surge to five-month highs.
