Stock Futures Decline as Wall Street Struggles to Sustain Positive Momentum

Traders work on the floor of the New York Stock Exchange (NYSE) on June 14, 2023 in New York City. Stock futures fell Tuesday as Wall Street struggled to carry over the positive momentum from last week. Futures tied to the Dow Jones Industrial Average slid 134 points, or 0.4%, while S&P 500 futures pulled back 0.4%. Nasdaq 100 futures declined 0.6%. Markets were closed Monday due to the Juneteenth holiday.

Investors are coming off of a strong week, even as the major averages had slipped on Friday. The S&P 500 and the Nasdaq Composite posted their best weekly performances since March, with the broad-market benchmark rising 2.6% and the tech-heavy index adding 3.25%. It was also the S&P 500’s fifth positive week in a row — a first since November 2021 — and the Nasdaq’s eighth consecutive positive week, a feat it previously accomplished in 2019.

Investors were seemingly receptive toward the central bank’s decision to skip a June rate hike last week. Federal Reserve Chairman Jerome Powell told a press conference on Wednesday that the central bank has yet to make a decision on policy ahead of the July meeting. However, policymakers are forecasting two more quarter-point rate increases later this year. The decision to skip a hike in June broke the Fed’s streak of ten consecutive interest rate increases.

Despite Powell’s insistence that future Fed policy will remain data dependent, stocks have been on an upswing. Investors are trying to gauge how last week’s strong market sentiment will hold up in a shortened trading week that is light on economic data. Housing starts data will be out on Tuesday morning.

New York Fed President John Williams will appear with Fed Vice Chair for Supervision Michael Barr at a corporate governance event in New York City on Tuesday. Fed Chair Powell is set to testify in front of Congress on Wednesday and Thursday.

In earnings, investors will look toward a quarterly report from shipping giant FedEx on Tuesday after the closing bell.

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Traders Take on Wall Street: Stock Futures Fall as Positive Momentum Fizzles

The excitement on the floor of the New York Stock Exchange (NYSE) was palpable as traders geared up for another day of fast-paced action. However, the mood quickly turned somber as stock futures took a tumble on Tuesday, failing to carry forward the positive momentum from the previous week.

Futures tied to the Dow Jones Industrial Average slid by 134 points, or 0.4%, while the S&P 500 futures pulled back by 0.4%. The Nasdaq 100 futures didn’t fare any better, declining by 0.6%. With markets closed on Monday to commemorate the Juneteenth holiday, investors were eagerly anticipating the continuation of last week’s strong performance.

Indeed, it had been an exceptionally robust week for investors, despite a slight dip on Friday. The S&P 500 and the Nasdaq Composite had recorded their best weekly performances since March. The broad-market benchmark saw a commendable rise of 2.6%, while the tech-heavy index added an impressive 3.25%. What’s more, the S&P 500 celebrated its fifth consecutive positive week, a noteworthy achievement not seen since November 2021. The Nasdaq also secured its eighth consecutive positive week, a feat it had previously accomplished back in 2019.

Part of the positive sentiment last week was attributed to the central bank’s decision to hold off on a rate hike in June. Federal Reserve Chairman Jerome Powell had emphasized that the central bank’s policy stance remained undecided in the lead-up to the July meeting. However, policy makers are strongly forecasting two quarter-point rate increases later in the year. This decision marked a departure from the Fed’s string of ten consecutive interest rate increases.

Despite the data-dependent approach emphasized by Powell, the stock market has continued its upward trajectory. Investors are eagerly trying to determine whether last week’s bullish sentiment can be sustained throughout this shortened trading week that’s light on economic data. One key indicator to watch out for is the release of housing starts data on Tuesday morning, which could sway market sentiment.

Adding to the mix, New York Fed President John Williams will join Fed Vice Chair for Supervision Michael Barr for a corporate governance event in New York City. On Wednesday and Thursday, all eyes will be on Fed Chair Powell as he testifies in front of Congress, providing further insights into the state of the economy and the central bank’s future plans.

In the midst of these developments, investors will also be eagerly awaiting the quarterly report from shipping giant FedEx, set to be released after the closing bell on Tuesday. This report could offer valuable insights into the health of the transportation sector and its potential impact on broader market trends.

As the trading day unfolds, traders on Wall Street brace for a rollercoaster ride, hoping to navigate the highs and lows with precision and finesse. Only time will tell whether the positive momentum can be reignited or if new challenges lie ahead.