Dow futures fall 170 points to start week on key inflation data, earnings ahead

Traders on the floor of the New York Stock Exchange.

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Stock futures are lower on Sunday night as markets emerge from a tumultuous week and investors look to key reports coming next week that can provide insight into the health of the economy.

Futures contracts linked to Dow Jones Industrial Average fell 0.6% to 29,171 units. S&P 500 It fell 0.8% to 3,622.5 points, while Nasdaq 100 futures fell 0.9% to 10,997.5 points.

Market watchers generally view the coming week as the start of earnings season, with four of the world’s biggest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi – report Friday. PepsiCo, Delta and Domino are also among the companies to report next week.

Inflation will also be in the spotlight as new monthly Consumer Price Index data arrives on Thursday morning.

It will be a whip week for market participants. The first half brought a relief rally that pushed the S&P 500 up more than 5% in its biggest two-day gain since 2020.

But jobs data that economists say will keep the Federal Reserve on track to continue raising interest rates and OPEC+’s decision to cut oil supply roiled investors, paring gains later in the week. When the day ended on Friday, the S&P was up 1.5% from where it started the week. The Dow and Nasdaq rose 1.5% and 0.7%, respectively.

Still, the Dow, S&P 500 and Nasdaq had the first positive week in the last four. However, all remain significantly bearish so far in 2022, and the Nasdaq is less than 1% off its 52-week low.

Meanwhile, the 2-year bond yield rose 6 basis points to close at 4.316%. One basis unit equals 0.01%.

“Stock market direction is likely to be lower because either the economy and corporate earnings will slow significantly or the Fed will have to raise interest rates even higher and keep them higher for longer,” said Chris Zaccarelli, chief investments. executive of the Independent Advisor Alliance, on Friday.

“Given the conditions we’re operating in, we think it’s prudent to start preparing for a downturn,” he added. “The talk of a shallow recession that is now our narrative-du-jour looks eerily similar to the ‘inflation is transitory’ narrative of last year.”

Last week brought heightened concerns that corporate earnings will show the downside of a rising dollar, as Levi Strauss became the latest to cut guidance due to sliding international sales.

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