Stock futures rose on Monday evening as investors prepared for the first of two crucial inflation readings scheduled for this week.
Futures tied to the Dow Jones Industrial Average gained 58 points, or about 0.1%. S&P 500 futures advanced 0.2%, while Nasdaq 100 futures climbed 0.4%. This positive movement came after the Nasdaq Composite slipped for the fourth consecutive day in the regular session. Traders rotated out of Big Tech stocks like Nvidia, which fell nearly 2%, and instead bought shares in sectors such as energy, healthcare, and materials. The 30-stock Dow rose nearly 0.9%, driven by gains in Chevron and UnitedHealth.
Looking ahead to Tuesday, the Producer Price Index (PPI), which measures wholesale inflation, is scheduled for release at 8:30 a.m. ET. Economists polled by Dow Jones expect headline PPI to grow by 0.4%, while the core figure, which excludes food and energy, is forecast to rise by 0.3%. These inflation figures, along with the Consumer Price Index (CPI) report due Wednesday, are expected to be key market movers as investors digest last week’s strong jobs report. The upcoming data will also provide insights into the Federal Reserve’s next moves on interest rate policy.
Adam Turnquist, chief technical strategist at LPI Financial, noted, “On a short-term basis, the market has shifted back to a good-news-is-bad-news backdrop. However, it is important to remember that, in the long term, good economic news is usually good for equity markets as it implies better-than-expected growth, upside to potential earnings, and reduced recession risk.”
In terms of interest rate policy, Fed funds futures suggest a near-certainty that the Federal Reserve will hold rates steady at its upcoming two-day meeting later this month. Markets also anticipate an 80% chance that rates will remain in the current target range of 4.25%-4.5% through March, according to the CME FedWatch Tool.
On the earnings front, fourth-quarter earnings season kicks off this week, with major U.S. banks including JPMorgan Chase, Citigroup, Goldman Sachs, and Wells Fargo set to report on Wednesday. Morgan Stanley and Bank of America are slated to release their results on Thursday.
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