In anticipation of March’s final week, which is abbreviated due to the upcoming holiday, stock futures exhibited a slight downturn on Monday morning.
Futures associated with the Dow Jones Industrial Average indicated a marginal decline of 63 points, equivalent to 0.16%. Likewise, S&P futures and Nasdaq 100 futures experienced a nearly 0.1% decrease.
The market is poised to mark its fifth consecutive month of upward movement, with major U.S. stock indices achieving new record closing highs the previous week. Last week saw the S&P 500 advancing by approximately 2.3%, while the Dow saw a gain of just under 2%, marking its most significant weekly increase since December and approaching the 40,000 mark. In parallel, the Nasdaq Composite surged about 2.9% during the same period.
These gains were propelled by the Federal Reserve’s recent comments, affirming the central bank’s plan to maintain its schedule of interest rate adjustments throughout the year. Additionally, investors’ sustained enthusiasm for technology stocks amidst the AI-driven rally contributed to the market’s buoyancy. The latest weekly American Association of Individual Investors Sentiment Survey indicates that overall investor sentiment remains higher than historical averages, underscoring persistent market optimism. However, concerns persist among some investors regarding the potential consequences of an overly extended rally and prolonged periods of higher interest rates.
Ryan Grabinksi of Strategas Securities noted in a Friday report, “Examining Fed rate cycles since the 1970s has revealed that, generally speaking, investors have more to fear from the first rate cut in a cycle than the pause, the period in which the central bank stops tightening and has yet to ease.”
Throughout the current week, investors await further insights into inflation trends from the release of the February personal consumption expenditures price index, which serves as the Fed’s preferred measure of inflation. This data will be disclosed on Friday morning, with the market’s reaction anticipated on the subsequent Monday due to the Good Friday holiday.
