U.S. stock futures drifted lower early Monday to kick off August after the biggest monthly gains since November 2020 for the S&P 500 left investors to debate whether gains mark a bottom or merely a bear-market bounce from the June lows.What’s happening
Futures on the Dow Jones Industrial Average
YM00,
-0.43%
fell 84 points, or 0.3%, to 32,741.
S&P 500 futures
ES00,
-0.60%
were down 16.25 points, or 0.4%, at 4,117.25.
Nasdaq-100 futures
NQ00,
-0.48%
were off 41 points, or 0.3%, at 12,930.50.
Stocks ended sharply higher on Friday, leaving the Dow
DJIA,
+0.97%
up 6.7% for the month, while the S&P 500
SPX,
+1.42%
saw a 9.1% July jump, the biggest monthly gains for both since November 2020. The Nasdaq surged 12.3% for its best monthly performance since April 2020 and its strongest July on record, according to Dow Jones Market Data.
What’s driving the market Big gains for stock indexes last week capped a strong July bounce fueled by earnings that have so far been better than feared. Investors also cheered what they saw as signals the Federal Reserve might not have to raise rates as aggressively as previously expected as the economy slows. “In equity markets, there were few signs of caution about how Fed speakers and the upcoming data might affect the narrative as generally impressive earnings results in both America and Europe gave the bulls the upper hand, while the retreat in yields provided additional support,” said Raffi Boyadjian, lead investment analyst at XM, in a note. Need to Know: FAANGs ain’t what they used to be, so beware the bear-market bounce says this hedge-fund manager On Friday, data showed that higher gasoline prices led the personal-consumption-expenditures price index up 1% in June, exceeding forecasts of 0.9%. June inflation measured by the PCE index showed the cost of living over the past year climbed 6.8%, the highest rate since January 1982. Last Wednesday, the Fed ended its two-day policy meeting with another 75-basis-point rate hike in an effort to curb soaring inflation. Fed Chair Jerome Powell said last week that another 75 basis-point move could be considered in September but that the Fed would take a data-dependent, meeting-by-meeting approach to decisions. Powell also warned that the economy would need to see a period of below-trend growth to rein in red-hot inflation and that the path to a so-called soft landing for the economy continued to narrow. Skeptics contend bulls, in looking for a so-called pivot from the Fed, were misreading the message from central bankers. Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday that the central bank is still committed to its goal of 2% inflation. However, “We are a long way away” from that goal, he said in an interview on CBS News’ “Face the Nation.” “Investors run the risk of reading too much into …