U.S. stock index futures showed muted movement on Monday, taking a breather after the S&P 500 and Nasdaq achieved record-closing highs. The pause comes as investors gear up for a week packed with crucial jobs data and Federal Reserve Chair Jerome Powell’s congressional testimony.
The Nasdaq, led by the tech rally, set a new intraday all-time high on Friday, continuing its surge driven by artificial intelligence. Meanwhile, the S&P 500 contributed to the three major indexes’ fourth consecutive monthly gain through February, prompting an upward revision in the year-end target by BofA Global Research.
With eyes on monthly non-farm payrolls, JOLTS, ADP National Employment reports, and the Fed’s “Beige Book,” analysts are anticipating insights into the U.S. labor market and the economy’s health. Powell’s testimony, scheduled for Wednesday and Thursday, is expected to maintain a wait-and-watch stance on policy amid recent inflation concerns.
Investors remain optimistic, but any negative surprises in economic data could challenge the prevailing upbeat sentiment. Expectations for the pace and depth of Fed rate cuts have been tempered, considering the risk of reigniting inflation with a stronger-than-expected economy.
As per HSBC analysts, despite strong labor market data, achieving the 2% inflation target may not be straightforward, with the first Fed rate cut still expected in June. Market participants see a 73.3% chance of the first cut in June and 90.4% odds in July, according to CME Group’s FedWatch tool.
As of early Monday, Dow e-minis were down 0.19%, S&P 500 e-minis down 0.1%, and Nasdaq 100 e-minis down 0.06%. Notable premarket movers include Nvidia, chipmakers like Micron Technology, Arm Holdings, and Macy’s, among others, with cryptocurrency and blockchain-related firms also making gains after bitcoin’s rally.
