U.S. equity futures inched lower Monday as investors looked forward to the latest reading of the Federal Reserve’s preferred inflation gauge as well as a slew of big earnings reports.
Futures tied to the Dow Jones Industrial Average were down by 0.11%, while S&P 500 futures and Nasdaq 100 futures ticked lower by about 0.2% each.
Stocks are heading into the final week of February on a high note after the major indexes achieved new milestones on Friday and registered winning weeks with help from Nvidia’s blockbuster earnings. The blue-chip Dow closed at an all-time high of 39,131.53, the broad-market S&P at one point in the session broke above 5,100 for the first time and the tech-heavy Nasdaq Composite touched a 52-week high in Friday’s session.
Investors are now watching whether the AI momentum can last as economic and inflation risks linger. With that in mind, they’re also looking ahead to the monthly personal consumption expenditures price index, the Fed’s favored inflation gauge due out Thursday.
“Nvidia has been the gift that keeps on giving with blockbuster earnings reports driving semis, tech, and the broader market higher this past week. With the market now up over 20% since its Oct 2023 low, we would expect the market to take a breather at some point,” Stephanie Lang, chief investment officer at Homrich Berg, told CNBC. “A hotter than expected PCE report this week could be a data point that could dampen the market enthusiasm.”
“So far stocks have shrugged off the hawkish tone of the Fed as the AI halo has taken center stage, but the market is banking on the Fed’s orchestration of a soft landing and the longer the Fed waits the more risk there is to that happy ending,” she added. “Still the Fed is well aware that they want to avoid a repeat of a stop-and-go tightening of interest rates in the 1970s when they failed to control inflation so they remain patient to make sure they are confident their job is done.”
There’s a raft of economic releases on deck, including January durable orders data on Tuesday and January wholesale inventories on Wednesday.
Elsewhere, corporate earnings are winding down but several high-interest names are reporting in the coming week which could give investors greater insight into the state of tech and the consumer.
Salesforce is the big name in tech this week; it’s due to report on Wednesday. Restaurants and several major retailers are also on deck, along with Norwegian Cruise, AMC Entertainment, J.M. Smucker, Hormel and Anheuser-Busch.
