U.S. stock futures declined on Monday, indicating ongoing challenges for the market in March, particularly ahead of the Federal Reserve policy meeting scheduled for this week.
U.S. stock futures drop: Eyes on Fed meeting
S&P 500 futures fell 0.6%, Dow Jones Industrial Average futures decreased by around 0.6%, and contracts on the tech-heavy Nasdaq 100 slid 0.7%. This downturn follows a week where the S&P 500 entered correction territory, reflecting a 10% loss from its February 19 high. The Dow recorded its worst weekly performance since March 2023, while all three major indexes experienced losses exceeding 2%. Investors faced significant economic concerns and uncertainty regarding President Trump’s unpredictable tariff policies.
The focus for Wall Street this week will be the Federal Reserve’s decision on interest rates, alongside comments from Chair Jerome Powell regarding the economic outlook. Analysts generally expect the Fed to maintain current rates, with close attention on the Fed’s latest “dot plot” that outlines policymakers’ future rate expectations.
February retail sales data is anticipated for release on Monday, which may shed light on consumer trends. Economists project a rebound from January’s 0.9% decline, forecasting a 0.6% increase. This data will follow the University of Michigan’s consumer sentiment survey, which indicated a decline in confidence regarding Trump’s management of the economy.
This week will also see quarterly earnings reports from companies including Nike, Getty, FedEx, and General Mills. A notable event is Nvidia’s GTC conference commencing on Monday, which is expected to deliver crucial updates for the beleaguered AI sector.
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Dow Jones futures fell by 0.45%, while S&P 500 futures lost 0.5% and Nasdaq 100 futures declined by 0.55%. Crude oil futures rose slightly.
In China, February retail sales increased by 4% compared to the previous year, and industrial production rose by 5.9%, both surpassing expectations. Additionally, fixed asset investment for January and February grew by 4.1%. The State Council announced efforts to stimulate consumption through wage growth and the stabilization of stock and housing markets, alongside potential childcare subsidies aimed at addressing declining birth rates.
Treasury Secretary Scott Bessent commented on the recent market corrections, labeling them as “healthy” and indicating he was not concerned about the stock market. He acknowledged, however, that there are “no guarantees” against a U.S. recession. Bessent also suggested that the markets are undergoing a “detox period” from excessive government spending, despite federal expenditures remaining unchanged.
The stock market experienced its fourth consecutive week of substantial declines, with the Dow Jones averaging a drop of 3.1%, marking its most significant decline in two years. The S&P 500 and Nasdaq composite fell by 2.3% and 2.4%, respectively, all hitting six-month lows. The small-cap Russell 2000 dropped 1.5%, resulting in a seven-month low.
Friday marked a potential rally attempt for the Nasdaq, currently on day three, while the S&P 500 and Dow Jones initiated their respective attempts. Positive signals indicate that the Nasdaq could confirm a rally attempt soon.
Gold and silver stocks alongside insurance companies remain relatively strong, with Berkshire Hathaway being a notable player. Additionally, various biotechs and industrial stocks are performing well.
The ten-year Treasury yield decreased slightly to 4.31%. Crude oil futures edged up to $67.18 a barrel last week.
The Innovator IBD 50 ETF rebounded by 1.9%, while the iShares Expanded Tech-Software Sector ETF saw a decline of 1.9%. The VanEck Vectors Semiconductor ETF increased by 0.7%, benefiting from major holdings like Nvidia and Broadcom. In contrast, the ARK Innovation ETF fell by 6.5%.
Nvidia’s GTC event from March 17-21 is anticipated to unveil advancements such as its GB300 AI chip. CEO Jensen Huang is scheduled to deliver a keynote address on agentic AI, robotics, and accelerated computing.
The GTC conference also designates Thursday as Quantum Day, focusing on innovations in quantum computing. Following recent bullish guidance, stocks like QBTS from D-Wave Quantum surged last week.
Market futures saw declines on a Sunday evening, suggesting that previous rebounds on Wall Street may have stalled due to ongoing uncertainties concerning trade tariffs and economic stability. The market anticipates economic signals from the Federal Reserve meeting this week.
Uncertainty regarding Trump’s tariff policies continues to pose a challenge for market stability, while inflation remains persistent alongside a cooling retail sentiment and labor market. These factors could influence the Fed’s stance on future rate adjustments.
Despite Friday’s gains across major indexes, there remains skepticism regarding the market’s capacity for sustained recovery, given the prevailing uncertainty. Comments from Bessent, who emphasized that recent corrections are healthy, did not significantly buoy market confidence.
The S&P 500 rose by 2.1% on Friday, closing at 5,638.94 points, while the Nasdaq Composite and Dow Jones Industrial Average climbed by 2.6% and 1.7%, respectively.
Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.
Featured image credit: Kerem Gülen/Ideogram
