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U.S. stock futures drifted lower Monday, as worries about Federal Reserve policy reverberated, on the technology sector in particular.
What’s happening
-
Futures on the Dow Jones Industrial Average
YM00,
-0.30%
fell 48 points, or 0.2%, to 36,059. -
Futures on the S&P 500
ES00,
-0.59%
eased 0.3%, or 15.25 points, to 4,652.50. -
Futures on the Nasdaq-100
NQ00,
-1.11%
slipped 0.7%, or 106 points, to 15,471.
On Friday, the Dow Jones Industrial Average
DJIA,
finished nearly unchanged, but the S&P 500 fell 0.4%
SPX,
and the tech-heavy Nasdaq Composite
COMP,
lost 1%. According to FactSet, growth stocks underperformed value stocks last week by the most since election week 2020.
What’s driving markets
Analysts were still discussing Friday’s payrolls report, which despite a worse-than-forecast reading on nonfarm payrolls did show a decline in the unemployment rate and a rise in wages.
Economists at Goldman Sachs now expect four Federal Reserve rate increases in 2022, instead of their previous call for three, and say a runoff in the balance sheet will commence in July instead of December. “Declining labor market slack has made Fed officials more sensitive to upside inflation risks and less sensitive to downside growth risks,” they said in a note to clients.
The eagerly awaited inflation report is due on Wednesday.
Which companies are in focus?
- Lululemon Athletica LULU warned fourth-quarter earnings and revenue would be at the low end of its target, citing the impact of the omicron variant on capacity and staff.
-
Shares of Take-Two Interactive Software
TTWO,
-0.01%
were in focus after reports that it would acquire Zynga
ZNGA,
-1.48%
in a deal with enterprise value of $12.7 billion, paying cash and stock of $9.86.
How are other assets faring?
- The yield on the 10-year Treasury note was virtually unchanged at around 1.77%, following the biggest weekly gain since September 2019 based on 3 p.m. Eastern Time levels, according to Dow Jones Market Data. Treasury yields and prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.2% Monday, after a 0.2% weekly slide.
- Oil futures CL00 traded modest lower, with West Texas Intermediate crude for February delivery CLG22 down 0.4% at $78.53 a barrel.
- Gold futures GC00, 0.19% for February delivery GCG22 traded less than 0.1% higher, to reach $1,798.30 an ounce, but with the most-active contract down 1.7% for the week.
- Bitcoin BTCUSD was trading down around 1% at about $41,000.
- The Stoxx Europe 600 SXXP trades 0.5% lower, while London’s FTSE 100 UKX retreated 0.1% lower.
- The Shanghai Composite SHCOMP rose 0.4%, while the Hang Seng Index HSI rose 1.1%, and Japan’s Nikkei 225 NIK was closed for a holiday.
