Shares went into losses in the first session of May after one of the worst monthly results for the S&P 500 from the depths of the pandemic in 2020.
S&P 500 contracts fell, erasing overnight profits. Dow and Nasdaq futures also fell red before the opening. US crude oil prices fell to $ 101 a barrel, and the reference 10-year yield on government bonds remained above 2.9%, or close to its highest level since December 2018.
Investors are preparing for more potential market events this week, which will take place after the volatile trading period in April. The S&P 500 sank 8.8% in April for its worst monthly performance since March 2020. Technology stocks were particularly hard hit, and the Nasdaq Composite fell 13% last month for its worst level since October 2008.
The next meeting of the Federal Reserve for monetary policy will be closely monitored in the coming days, with the central bank ready to issue its latest policy statement and hold a press conference with Fed Chairman Jerome Powell on Wednesday afternoon. Market participants expect the Fed to raise interest rates by 50 basis points at the end of the meeting, marking the first rate hike of its magnitude since 2000. interest rate range on federal funds to between 0.25% and 0.50% and raising the lower end of the range above zero for the first time since March 2020.
The Federal Reserve is also expected to officially announce that it will begin quantitatively tightening or removing assets from its $ 9 trillion balance sheet. Central dug up assets and added to its balance sheet during the pandemic as another means of helping the economy affected by the virus. However, expectations of the abolition of this construction have caused volatility as markets have become accustomed to these easy money policies.
And as US GDP growth has turned negative for the first time since mid-2020 in the first quarter of this year, some experts have begun to doubt whether the Fed will be able to tighten monetary policy without causing a deeper economic downturn. activity.
The story continues
“The risk of a recession has risen and the financial health of the private sector may ultimately determine whether policy tightening will push the economy down,” Goldman Sachs chief economist Jan Hatzius said in a note Sunday. “Financial fragility in the private sector has historically exacerbated the impact of the headwind facing today’s expansion: higher interest rates, rapid wage inflation and slowing growth.
Meanwhile, the earnings season will also continue this week, with a number of closely monitored companies from Airbnb (ABNB) to Uber (UBER) and Lyft (LYFT) and Block Inc. (SQ) report the results. Earlier this week, 55% of the components of the S&P 500 reported actual results for the first quarter, 80% of which exceeded earnings per share forecasts, while 72% exceeded earnings expectations, according to FactSet.
The expected growth rate of profits for companies in the S&P 500 as a whole also rose to 7.1%, from 4.7% at the end of March, notes FactSet. However, if the actual growth rate of the index’s profit in the first quarter remains at 7.1%, it would mean the slowest rate since the fourth quarter of 2020.
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7:43 a.m. ET Monday: Stock futures are heading for a higher opening
Here is where the markets traded on Monday morning before the opening bell:
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S&P 500 futures (ES = F): +7.5 points (+ 0.18%) to 4135.00
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Dow futures (YM = F): +89 points (+ 0.27%) to 32,971.00
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Nasdaq futures (NQ = F): +27.75 points (+ 0.22%) to 12,879.75
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Crude oil (CL = F): – $ 2.95 (-2.82%) to $ 101.74 per barrel
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Gold (GC = F): – $ 32.40 (-1.69%) to $ 1879.30 per ounce
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10-year treasure (^ TNX): +3.5 bps for 2.92% yield
NEW YORK, NEW YORK CITY – APRIL 28: Traders work on the floor of the New York Stock Exchange (NYSE) on April 28, 2022 in New York. The Dow Jones Industrial Average rose in morning trading as markets continued to go through a period of instability due to fears of inflation and the war in Ukraine. (Photo by Spencer Platt / Getty Images)
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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