As investors become cautious ahead of earnings, US Stock Index futures decline
U.S. stock index futures declined on Monday as investors braced for the start of earnings season, which could put profits under pressure at a time of growing worries about an economic slowdown brought on by rash interest rate hikes.
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In anticipation of the start of earnings season, which might see profits under pressure at a time of mounting concerns about an economic slowdown due to aggressive interest rate hikes, U.S. stock index futures dipped on Monday.
U.S. stocks began July on a positive note after a miserable first half of the year, but market players are concerned that approaching quarterly data may cause another selloff because earnings may not meet expectations.
Trading was bumpy last week, but investors found some solace in falling commodity prices and hints of a more moderate rate hike schedule from the U.S. Federal Reserve amid rising worries about a worldwide recession.
On Friday, all three of the major indices showed gains, while the Nasdaq (.IXIC) posted gains for five sessions in a row.
Currently, the market is mostly pricing in a 75-basis-point rate increase for later in July, but after a stronger-than-expected jobs report on Friday, concerns about the speed of future rate increases have intensified.
The report, which showed a still robust job market, helped allay some concerns about an impending recession, but it also raised concerns about the Fed's potential for more aggressive tightening of monetary policy in an effort to rein in spiralling inflation.
This week's quarterly reports from major financial institutions like JPMorgan Chase & Co., Citigroup Inc., and Morgan Stanley (MS.N) will be scrutinised for any indications of sluggish economic growth. In premarket trading, the shares of the banks decreased by 0.7 percent to 1.1 percent.
Investors will also be paying close attention to U.S. consumer price data later this week to assess the condition of inflation and the potential vigour of the Fed's response.
At 6:51 a.m. ET, the Nasdaq 100 e-minis were down 80.75 points, or 0.66 percent, the S&P 500 e-minis were down 19.25 points, and the Dow e-minis were down 110 points, or 0.35 percent.
Shares of Twitter Inc (TWTR.N) fell 6.6 percent after Tesla CEO Elon Musk announced on Friday that his agreement to acquire the social media business was being terminated.
Following Macau's decision to close all of its casinos for the first time in more than two years in an effort to stem the spread of COVID-19, U.S. casino operators Las Vegas Sands (LVS.N), Wynn Resorts (WYNN.O), and Melco Resorts saw their share prices drop by between 4.6 percent and 5.7 percent.
