U.S. stock futures were flat in extended trading late Monday following another day of gyrations in equity markets as worries around persistent levels of inflation and the prospect of an economic slowdown continued to weigh on sentiment.
Futures tied to the S&P 500 were near breakeven after the benchmark struggled to shake off last week’s losses and closed lower in the main session. Contracts on the Dow Jones Industrial Average rose and the Nasdaq Composite also traded near the flatline.
Monday’s moves extend six straight weeks of losses for the S&P 500, its longest losing streak in more than a decade, and seven consecutive down weeks for the Dow Jones Industrial Average, the index’s widest period of weekly losses since 2001.
Uncertainty around the pace and magnitude of the Federal Reserve’s rate hiking cycle has stoked pressure across markets that has persisted throughout the year. In 2022 so far, the S&P 500 is roughly 17% below its all-time high on Jan. 3, while the Dow is down about 13% over the same period and the Nasdaq has fallen deeper into a bear market – well over 20% below its record closing price in November.
“Markets lead the economy,” Citi Private Bank Chief Investment Officer David Bailin told Yahoo Finance. “The fact that markets are lower at this point means that the consumer is slowing, and the global economy is slowing.”
Equity markets have endured “severe technical damage” in recent months, with the S&P 500 falling below the important 4,000 level last Monday before testing bear market levels near 3850 last Thursday, Comerica Wealth Management Chief Investment Officer John Lynch pointed out in an emailed note.
“Curiously, comments from Fed Chair Jerome Powell indicating the likelihood of economic pain in order to achieve the central bank’s objectives of lowering inflation may have been the catalyst for the S&P 500’s rally beginning Thursday afternoon and lasting through Friday’s close,” Lynch wrote. “Nevertheless, we caution investors that the severe technical damage suffered these past several months will take longer than a few good days to repair.”
Investors will have more Fedspeak to mull in the coming days, with Fed Chief Jerome Powell set to give remarks at a conference hosted by the Wall Street Journal Tuesday afternoon, and speaking engagements from other central bank officials slated to take place through Friday.
“The inconvenient truth is the Fed is going to need to raise rates more quickly and to a higher level than many were hoping,” Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli said recently in an emailed note. “There will be at least four 50 bps rate hikes this year and not three or less and we will continue to be cautious with risk assets.”
6:17 p.m. ET Monday: Stock futures little changed following narrow recovery in markets
Here’s where stock futures were in extended trading ahead of the overnight session Monday:
S&P 500 futures (ES=F): -1.00 (-0.02%) to 4,003.75
Dow futures (YM=F): -4.00 (-0.01%) to 32,155.00
Nasdaq futures (NQ=F): +4.50 (+0.04%) to 12,249.25
Crude (CL=F): -$0.51 (-0.45%) to $113.69
Gold (GC=F): +$10.20 (+0.56%) to $1,824.20 per ounce
10-year Treasury (^TNX): -5.8 bps to yield 2.8770%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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