Market Snapshot: Stock futures struggle for direction amid Fed rate-hike gloom

by | Oct 10, 2022 | Stock Market

U.S. stock futures were looking for direction Monday as worries about Fed rate rises persisted, with major indexes trading not far off their 2022 lows set at the end of last month. Investors were looking ahead to key inflation data due later this week, as well as minutes of the Fed’s September policy meeting and the start of earnings season.

How stocks are trading
S&P 500 futures
ES00,
+0.09%
erased earlier losses to tick up 3.50 points, or 0.1%, to 3,656.75.

Dow Jones Industrial Average futures
YM00,
+0.21%
rose 63 points, or 0.2%, to 29,416.

Nasdaq 100 futures
NQ00,
-0.07%
were down 9.50 points, or 0.1%, at 11,092.

On Friday, the Dow Jones Industrial Average
DJIA,
-2.11%
fell 630 points, or 2.1%, the S&P 500
SPX,
-2.80%
declined 2.8%, and the Nasdaq Composite
COMP,
-3.04%
dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.What’s driving markets U.S. stocks were in line for a fourth consecutive session of losses as concerns about additional interest rate rises by the Federal Reserve continued to dampen sentiment. Trading was expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market. Soft data a week ago raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multi-decade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again. See: Why stock-market investors keep falling for Fed ‘pivot’ talk — and what it will take to put in a bottom The 5-day round trip saw an average move for the S&P 500 of 1.9%. Little surprise then that the CBOE Vix index
VIX,
+3.92%,
a gauge of expected S&P 500 volatility, sat on Monday at 31.4, more than 50% above its long term average of 20. “The market response to Friday’s U.S. jobs report was characteristic of a bear market in equities. U.S. indices reversed sharply in the absence of the bad economic news required to shake the Fed’s hawkish determination,” said Ian Williams, strategist at Peel Hunt.

Now traders will look toward more data due later in the week for further guidance on Fed thinking and equity valuations. The U.S. producer price numbers will be released on Wednesday and the consumer prices r …

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