Traders on the NYSE floor, August 4, 2022.
Stock futures were slightly lower in overnight trading on Sunday, following the S&P 500’s third straight weekly gain, as investors focused on a key inflation report this week.
Dow Jones Industrial Average futures fell 70 points. S&P 500 and Nasdaq 100 futures fell 0.3%.
The overnight action followed a weekly gain for the S&P 500 and Nasdaq Composite as a surprisingly strong monthly jobs report eased some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Federal Reserve.
A new consumer price index reading due on Wednesday will give investors more clarity on the central bank’s next move at its September policy meeting. Traders are now pricing in a higher probability of a 0.75 percentage point increase next month, which would be the third consecutive increase of this magnitude.
“The strong gains in the labor market last month should further bolster the case that the U.S. is not currently in a recession,” said Jeffrey Roach, chief economist at LPL Financial. “The big increase in job holdings was a surprise and could convince people … that the economy needs another 75 basis point hike at the next Fed meeting. Now all eyes are on the inflation”.
The overall CPI, which includes energy and food, is expected to fall to 8.7% in July, from a 40-year high of 9.1% in June, according to Dow Jones.