U.S. stock index futures were slightly higher overnight Sunday, as the S&P 500 comes out of its longest streak of daily losses since February. Fears of slow economic growth and rising inflation put pressure on the market.
Futures contracts linked to the Dow Jones Industrial Average gained 51 points. S&P 500 futures rose 0.18%, while Nasdaq 100 futures rose 0.14%.
All three major averages ended lower on Friday, with the Dow Jones and S&P posting losses for the fifth day in a row, while the Nasdaq Composite posted its third consecutive negative session.
For the week, the Dow Jones and S&P lost 2.15% and 1.69%, respectively, their worst weekly performance of each average since June. The tech-rich Nasdaq recorded its worst week since July, losing 1.61%.
Data released on Friday showed producer prices rose 0.7% in August and 8.3% year-on-year, the largest annual increase since it was first recorded in November 2010. .
The closely watched Consumer Price Index will be released on Tuesday, when the street will examine how much higher costs are passed on to consumers. Economists polled by FactSet expect this reading to show that consumer prices rose 5.3% at an annualized pace in August. Retail sales figures will be released later this week.
“Supply bottlenecks, lack of inventory, high raw material prices and high shipping rates have all contributed to rising input costs,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “[Friday’s] The wholesale pricing data should be a revelation for the Fed, as inflationary pressures still remain unanswered and are expected to be felt by consumers in the coming months. “
Shares have been under pressure since the August employment report, released by the Labor Department on September 3, fell short of expectations. The market fears the pandemic will continue to hamper economic growth as high inflation prompts the Federal Reserve to act.
“The negative impact of the delta variant on cyclical trading is clear,” noted Jefferies’ famous strategists. “It is increasingly clear that the impact of Delta is delaying any Federal Reserve registration effort, so it has given new impetus to big tech stocks with outperforming growth so far. this trimester.”
The Federal Reserve will begin its two-day policy meeting on September 21, during which investors will look for clues to the central bank’s bond-buying program.
Key averages are still relatively close to their all-time highs, despite losses last week. The Dow Jones is up 2.87% from its all-time high, while the S&P is down 1.92% from its high. Meanwhile, the Nasdaq Composite is down 1.87% from its all-time high.
All three posted double-digit percentage gains for the year, but the continued impact of Covid-19 could slow the pace of the recovery.
“The outlook for post-pandemic economic growth has cooled in time for the fall,” Goldman Sachs said in a note to clients on Friday. “Within the market, the prices for the months reflect the weak economic environment,” the company said. Last week, Goldman lowered its GDP growth forecast for the fourth quarter, citing the impact of the delta version on consumer spending.
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