Stock futures took a downward turn on Monday as investors prepared for a critical US inflation report and a week filled with potential insights into consumer resilience in the midst of high borrowing costs.
The S&P 500 (^GSPC) futures saw a drop of approximately 0.2%, marking a less-than-ideal start to the week following a rebound on Friday that wrapped up a second consecutive week of gains for US indexes. Meanwhile, Dow Jones Industrial Average (^DJI) futures remained relatively steady, and Nasdaq 100 (^NDX) futures dipped around 0.3%.
All eyes are on the October Consumer Price Index report scheduled for release on Tuesday, as this data is a crucial factor influencing the Federal Reserve’s interest-rate decisions. Comments from several Fed officials last week left the door open for additional rate hikes, quelling optimism for a reprieve in tightening that had been supporting stock prices.
Heightening the cautious atmosphere are concerns about the US government’s financial situation, following a downgrade in the debt outlook by Moody’s from “stable” to “negative” and with another potential shutdown looming as the week progresses. Former Fed official Bill Dudley warned that lawmakers are not motivated to address the fiscal crisis, and the high interest rates are exacerbating the debt problem.
This week is also set to bring a slew of earnings reports from major retailers, including Home Depot (HD), Target (TGT), and Walmart (WMT). The latest financial results from Fisker (FSR) and Tyson (TSN) are set to be revealed on Monday. Attention will be on these updates to glean insights into the state of the American consumer, especially after recent economic data showed a deteriorating sentiment about the US economy.
In addition to the economic and financial developments, all eyes are likely to be on the face-to-face meeting between President Joe Biden and Chinese President Xi Jinping on Wednesday. This meeting marks their first in a year, and the strained relationship between the two superpowers is seen as a risk to an already fragile global economy.
