Traders work on the floor of the New York Stock Exchange during the afternoon of January 22, 2024 in New York City. The Dow and S&P hit all-time highs, with the Dow Jones closing above 38,000 points for the first time ever as stocks continued to rise.
Michael M. Santiago | Getty Images News | Getty Images
US stock futures fell across the board Sunday night as Wall Street looked ahead to several huge tech earnings reports and an interest rate policy decision by the Federal Reserve.
Futures contracts tied to the Dow Jones Industrial Average fell 88 points, or 0.2%. S&P 500 and Nasdaq 100 futures fell 0.2% and 0.3%, respectively.
The three major averages rose during the previous trading week following encouraging economic data. Economic growth in the fourth quarter was stronger than expected, while core inflation year-on-year was lower than economists expected, indicating a slowdown in price increases. However, the market's gains were weaker compared to the previous week's rise after notable companies such as Intel and Tesla disappointed on the earnings front.
This week marks the busiest week of earnings season, with 19% of the S&P 500 reporting earnings. Big tech names Microsoft, Apple, Meta, Amazon and Alphabet – part of the core group of big tech companies that led this year's rally – will publish their results. Investors will also be watching Dow Jones components, such as Boeing and Merck.
Meanwhile, the Federal Open Market Committee will begin its two-day policy meeting on Tuesday. Investors are almost certain that the central bank will keep interest rates steady. Traders in the federal funds futures market have set a roughly 97% probability that the Fed will not cut interest rates at the next meeting, according to the Fed. cm group.
“The Fed doesn't have to worry about a hot economy stoking inflation anymore, because we're literally seeing the opposite. The economy is above trend and inflation is falling,” believes Sonu Varghese, global strategist at Carson Group. “In terms of portfolio allocation, we are overweight stocks.”
To be sure, he added that although the Fed will likely cut interest rates later this year, “and perhaps lead to some capital appreciation,” [it will] “Maybe not as much as the market expects.”
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