October 7, 2022

Traders on the floor of the NYSE, August 4, 2022.

Source: NYSE

Stock futures were flat overnight Sunday after the S&P 500 posted its third straight weekly gain as investors turned their focus to a core inflation report this week.

Futures on the Dow Jones industrial average fell 40 points. S&P 500 and Nasdaq 100 futures were down 0.1%.

The overnight action followed a weekly gain for the S&P 500 and Nasdaq Composite as a surprisingly strong monthly jobs report eased some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Federal Reserve.

A new reading of the consumer price index, due out on Wednesday, will give investors more clarity on the central bank’s next move at its policy meeting in September. Traders are now pricing in a higher probability of a 0.75 percentage point increase next month, which would be the third straight increase of that size.

“Strong gains in the labor market last month should further bolster the case that the U.S. is not currently in a recession,” said Jeffrey Roach, chief economist at LPL Financial. “The big job gain was a surprise and could convince people that the economy needs another 75 basis point hike at the next Fed meeting. All eyes are now on inflation.”

The core CPI, which includes energy and food, is expected to fall to 8.7 percent in July, from a 40-year high of 9.1 percent in June, according to Dow Jones.

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