U.S. stock futures had a bumpy start on Monday, as the S&P 500 contract fluctuated within a nearly 40-point range. This comes as Wall Street seeks to break a two-week losing streak.
How Stock-Index Futures are Performing
- S&P 500 futures (ES00) rose 11 points, or 0.2%, reaching 4490.
- Dow Jones Industrial Average futures (YM00) increased by 73 points, or 0.2%, reaching 35427.
- Nasdaq 100 futures (NQ00) climbed 62 points, or 0.4%, reaching 15161.
Previous Performance
On Friday, the Dow Jones Industrial Average (DJIA) rose by 105 points, or 0.3%, closing at 35281. The S&P 500 (SPX) experienced a decline of 5 points, or 0.11%, closing at 4464. The Nasdaq Composite (COMP) dropped 93 points, or 0.68%, closing at 13645.
Lingering Concerns and Recent Losses
Although futures have rebounded from session lows and appear slightly more stable, the cautious sentiment remains as the new week begins. Lingering concerns about China’s economy are not helping market sentiment.
The S&P 500 recently faced two consecutive weeks of losses, with a total decline of 2.6%. This decline occurred after the rally in several major technology stocks, such as Apple (AAPL) and Nvidia (NVDA), faltered.
Furthermore, the choppiness in the benchmark 10-year Treasury yield (BX:TMUBMUSD10Y) has also contributed to the discouragement of stock buyers. The yield has approached its highest level since the Great Financial Crisis, partially due to expectations of increased government issuance.
Steady Downdraft in the Markets
Although markets have not experienced any significant meltdowns, they’ve been riding a steady downdraft. Last week, the rates markets capped equity gains as U.S. yields rose, possibly due to supply and economic resilience. Indeed, equities had their roughest start to the month since March as tech stocks have given up gains as U.S. yields lurch higher, even as inflation falls.
Second Quarter Earnings Season Winding Down
With more than 90% of the S&P 500 having reported, the second quarter earnings season is starting to wind down, though retailers will be a feature in the coming days as Home Depot, Target, and Walmart present their numbers.
Economic Clues for Investors to Digest
“While the company news decelerates, there is no shortage of further economic clues for investors to digest, including the latest Fed minutes, building permits and housing starts data, and a general housing market index release,” said Richard Hunter, head of markets at Interactive Investor.
Asia’s Sour Tone Containing Rise in Risk Assets
A sour tone from Asia was containing any rise in risk assets on Monday, after Country Garden Holdings, China’s biggest homebuilder, saw its shares plunge to another record low on news it was suspending trading in around 11 of its mainland bonds. The news added to fears about the health of the world’s second biggest economy and left Hong Kong’s Hang Seng down 1.7%.
