U.S. stock futures were relatively flat on Monday night amid anticipation of megacap earnings, the Federal Reserve’s interest rate decision, and upcoming jobs report. Despite a positive start to the week, stocks are expected to break a six-month winning streak. Dow Jones Industrial Average futures fell slightly, while S&P 500 and Nasdaq 100 futures also saw small declines.
Tesla’s shares surged after the company achieved a significant milestone in advanced driver-assistance technology in China, boosting overall market sentiment. Apple also saw gains following a bullish upgrade of its stock. The S&P 500 and Nasdaq Composite both posted gains, while the Dow Jones Industrial Average rose by 0.38% in the previous session.
However, stocks are on track to record their first losing month since October, as expectations for interest rate cuts have declined compared to the beginning of the year. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are all expected to see losses in April, with the 30-stock index potentially experiencing a more than 3% decrease.
Market expectations for rate cuts in 2024 have significantly decreased, with only one quarter percentage point cut now priced in, down from initial projections of six or seven cuts at the start of the year. This shift is attributed to persistent inflation and a strong economy, leading to concerns that the Fed may hold rates steady for an extended period.
The upcoming week is set to be busy with the Federal Reserve holding its two-day policy meeting, where interest rates are expected to remain unchanged. However, traders are worried that Fed Chair Jerome Powell’s post-meeting statements may lean towards a more hawkish stance, especially in light of recent inflation reports. The week will also see major companies like Amazon, Apple, McDonald’s, Coca-Cola, and others reporting their quarterly results.
The April jobs report is another key event expected at the end of the week, adding to the overall market volatility and uncertainty. With a combination of corporate earnings, economic data, and Fed decisions, investors will closely monitor developments in the coming days to gauge the direction of the stock market and the broader economy.
