Stock futures fell slightly after the market’s best month since 2020 as investors await another week of key earnings reports and economic data.
Dow Jones Industrial Average futures fell 67 points, or 0.2%. S&P 500 futures were down about 0.2% and Nasdaq 100 futures were down 0.3%.
Friday, all major indexes gained, posting winning weeks and capping the best month of the year so far and then some. The Dow gained 6.7% in July, while the S&P 500 rose 9.1%. The Nasdaq Composite rose 12.4% as investors rushed to the tech stocks that took the biggest hit during this bear market. For each index, July’s performances were the best since 2020.
“We’re seeing an uptick in relief in the stock market as pessimism reached extreme levels and long-term interest rates have moved lower again,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.
“We think the rally will extend into later summer, but as stock prices rally and it becomes increasingly clear that we are headed for a more typical recession (ie one with higher unemployment high and nominal GDP falling close to zero or negative), the markets will again have another sell-off,” he added. “But until then, enjoy the rally as it will probably catch a lot of people off guard.”
Investors have more economic data and corporate earnings to digest this week. On Monday, companies like Activision Blizzard, Devon Energy, Loews and more report earnings. Later in the week Uber, Caterpillar, Starbucks, Eli Lilly, Amgen and others are also scheduled to report.
In addition, Friday’s nonfarm payrolls report from the Bureau of Labor Statistics will provide further insight into the strong labor market. So far this year, solid job growth has led economists to say the U.S. is not currently in a recession, even with two consecutive quarters of negative GDP.
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