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Stock futures are flat after a losing week on Wall Street

Published:

Traders on the ground of the NYSE, June 3, 2022.

Source: NYSE

Stock futures were little modified in overnight trading Sunday after a losing week as investors continued to bet that the Federal Reserve will tighten monetary policy aggressively to combat surging inflation.

Futures on the Dow Jones Industrial Average gained 30 points. S&P 500 futures and Nasdaq 100 futures were each flat.

The overnight motion followed one other disappointing week for investors as the most important averages suffered modest losses. The blue-chip Dow fell 0.9% for its ninth negative week in 10, while the S&P 500 and the Nasdaq Composite lost 1.2% and 1%, respectively, last week for his or her eighth losing week in nine.

Investors have been grappling with fears that the central bank could raise rates of interest too fast and an excessive amount of, causing a recession. Recent statements from the rate-setting Fed members indicate that 50 basis point — or a half-percentage-point — rate increases are likely on the June and July meetings.

The U.S. economy added 390,000 jobs in May, which got here in higher than expected despite fears of an economic slowdown and amid the roaring pace of inflation. Some investors consider the strong hiring data might be clearing the way in which for the Fed to stay aggressive.

“For now, the market sees a Federal Reserve attempting to navigate a painful and bumpy road, yet trying to seek out a soft exit,” said Quincy Krosby, chief equity strategist at LPL Financial. “And the market finds itself between wanting to consider within the rallies but not believing that the Fed can negotiate a soft landing.”

Investors can be focused on the buyer price index reading for May, which is slated for Friday morning release. The important thing inflation gauge is predicted to be just barely cooler than April, which might be interpreted by some as a confirmation that inflation has peaked.

The stock market has had a volatile yr with the most important averages pulling back double digits from their record highs. The S&P 500 is off by 14.7% from its all-time high reached in January. The equity benchmark briefly dipped into bear market territory last month.

“The second half of 2022 goes to be a roller coaster ride for investors unless the Fed is capable of bring inflation under control and not using a hard landing,” said Peter Essele, head of portfolio management at Commonwealth Financial Network. “Most investors appear to be wagering on a crash-and-burn scenario at this point as recessionary fears abound, and equity markets fail to develop any type of positive momentum.”

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