US stock futures experienced a decline on Monday following remarks from Federal Reserve Chair Jerome Powell, dousing hopes for an imminent interest rate cut and adding pressure to a week already filled with crucial corporate earnings reports. S&P 500 futures saw a 0.2% drop, signaling a retreat from the benchmark’s recent record-setting performance. Dow Jones Industrial Average futures also slipped approximately 0.2%, and Nasdaq 100 futures registered a 0.1% decline.
The market, which had seen a rollercoaster week culminating in positive momentum due to a strong January jobs report and robust earnings updates, faced a setback after Powell’s “60 Minutes” interview on Sunday. Powell reiterated his cautious stance on rate cuts, emphasizing the risk of moving too quickly amid ongoing efforts to curb inflation.
Traders responded by scaling back their expectations for rate cuts not only in March but also in May, according to the CME FedWatch Tool. The impact extended to US bonds, with the 10-year Treasury yield rising approximately six basis points to 4.08%.
Investors are now turning their attention to quarterly earnings reports for inspiration, following the buoyant performance driven by Meta and Amazon the previous week. The economic calendar is relatively light, heightening the significance of corporate results. McDonald’s initiated the wave of quarterly earnings on Monday with a somewhat disappointing outcome as its sales fell short of Wall Street estimates.
