Stock Futures Overview
Stock futures experienced a slight decline in overnight trading on Sunday following a remarkable week for the S&P 500. Futures tied to the S&P 500 fell 0.03%, Dow Jones Industrial Average futures dropped by 8 points (0.02%), and Nasdaq-100 futures edged down by 0.08%.
Market Performance Recap
The S&P 500 recently posted its best week of the year, surging by 3.9%, marking its strongest weekly gain since 2023. The Nasdaq Composite and Dow Jones Industrial Average also saw impressive gains, rising 5.2% and 2.9%, respectively.
Liz Young Thomas of SoFi remarked on the recent market movements: “Much like some of the last recoveries that we’ve had after pullbacks, this was a little game of ‘put the money back where it came from.’” She emphasized that the market needed positive news to counteract the previous week’s downturn, which arrived through favorable retail sales, initial jobless claims, and results from Walmart.
Recent Market Dynamics
August began with significant volatility, driven by disappointing economic data that fueled recession fears and concerns over the Federal Reserve’s rate-cutting strategy. The S&P 500 experienced its worst day since 2022 on August 5. However, last week’s data, including a slower 12-month inflation rate of 2.9%—the lowest in over three years—helped stabilize the market and buoyed hopes for a soft landing scenario.
Upcoming Key Events
Investors are focusing on Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium on Friday, seeking clarity on future rate cuts. Additionally, the Federal Reserve’s recent meeting minutes are scheduled for release on Wednesday, which could provide further insights. The Democratic National Convention also begins on Monday.
Earnings season continues with reports from companies such as Palo Alto Networks and Estee Lauder expected to be released.
European Markets
European markets opened the new week with mixed results after last week’s global rally. The pan-European Stoxx 600 index was marginally lower by 0.08% at the opening. Key European indices showed divergent movements:
FTSE 100 (UK): Down 0.23% at 8,292
DAX (Germany): Down 0.11% at 18,303
CAC 40 (France): Up 0.5% at 7,454
FTSE MIB (Italy): Up 0.23% at 33,115
Interest Rates Outlook
John Canavan of Oxford Economics anticipates potential increases in yields before the Federal Reserve’s September policy meeting. He suggests that markets may have become too optimistic and that there could be a corrective unwinding of the recent bull-steepening trade. Canavan predicts two rate cuts this year, with the first 25 basis point cut expected in September and the second in December.
