Traders on the floor of the New York Stock Exchange had reason to be optimistic as stock futures inched higher in overnight trading on Sunday. The S&P 500 had just wrapped up its best week of 2024, with the index rallying 3.9%. Futures tied to the S&P 500 rose 0.1%, while Dow Jones Industrial Average futures added 30 points, or 0.1%. Nasdaq-100 futures also edged up 0.2%, indicating a positive start to the trading week.
The previous week had been a volatile one for equities, with concerns about recession fears and the Federal Reserve’s rate cuts sparking a global sell-off. However, the market seemed to find its footing last week, buoyed by positive retail sales, initial jobless claims, and strong results from retail giant Walmart. SoFi’s Liz Young Thomas noted that the market needed “good news” to begin recovering from the previous week’s rout, and it seemed to have found it.
The positive momentum in the market was further supported by fresh data that showed a slowdown in the 12-month inflation rate, which measured 2.9% in July – its lowest reading in more than three years. This data helped to ease concerns about the economy and boosted hopes for a soft landing scenario.
Looking ahead, investors are eagerly awaiting Fed Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday, where they hope to gain more clarity on the outlook for rate cuts. Additionally, minutes from the Federal Reserve’s most recent meeting are set to be released on Wednesday, providing further insight into the central bank’s thinking. The Democratic National Convention is also kicking off on Monday, adding to the political and economic events that investors will be monitoring closely.
Earnings season continues to be in focus, with Palo Alto Networks and Estee Lauder set to report their results on Monday. The ongoing earnings reports will provide further insight into the health of corporate America and its impact on the broader market.
Overall, the positive momentum in the market following last week’s rally reflects a sense of cautious optimism among traders and investors. While volatility may still persist, the recent data and events have provided some reassurance that the economy is on a stable path. As the week unfolds, market participants will be closely watching for any developments that could impact the trajectory of stocks and indices.
