Stock futures fall ahead of blockbuster week

U.S. stocks fell on Monday as investors await a blockbuster week that includes the latest Fed meeting, a flurry of heavy earnings reports and jobs data.

The S&P 500 (^GSPC) fell 1.3%, while the Dow Jones Industrial Average (^DJI) lost nearly 0.8%. The tech-heavy Nasdaq Composite (^IXIC) fell about 2%.

The yield on the benchmark 10-year US Treasury rose to 3.546% Monday morning. The dollar index rose 0.32% to $102.26.

Stocks closed a winning week on Friday after data pointed to stronger-than-expected U.S. economic growth. All major market averages ended higher for the week, with the S&P 500 gaining 2.5%, the Dow Jones Industrial Average ending up 1.8% and the Nasdaq climbing north of 4%.

The Commerce Department said Friday that the price index for personal consumption expenditures, excluding energy and food, showed prices rose 4.4% from a year earlier. Friday’s report came a day after the government reported a better-than-expected 2.9% gross domestic product gain for the fourth quarter, bolstering hopes that the Federal Reserve could head into the elusive scenario of “soft landing”.

Fed officials will meet in Washington, DC on Tuesday and Wednesday. The meeting will end with Fed Chairman Jerome Powell holding a press conference on Wednesday afternoon as he outlines signs of the central bank’s way forward on rate hikes.

“The FOMC’s job isn’t done yet, although recent declines in inflation and wage growth give it more time to assess the effects of past policy actions. A key challenge for the FOMC will be executing its transition to lower rate hikes without reinforcing expectations that the end of its hike cycle is imminent,” the Barclays team wrote.

At the end of the week, investors will have another clue to the Fed’s trajectory as the government’s January jobs report is due out Friday morning. Economists polled by Bloomberg expect 185,000 jobs to have been added to the economy last month, a slowdown from December’s gain of 223,000 jobs.

Chairman of the Board of Governors of the Federal Reserve System Jerome H. Powell participates in a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023. TT News Agency/Claudio Bresciani /via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALE IN SWEDEN.

Meanwhile, it’s the biggest week of the fourth-quarter earnings season, with Big Tech’s results in the spotlight amid thousands of industry layoffs. Despite previously announced job cuts, tech companies are partly to blame for the disaster, writes Dan Howley of Yahoo Finance.

The list of top earners includes reports from tech heavyweights Amazon (AMZN), Apple (AAPL), Alphabet (GOOG) and Meta Platforms (META).

Elsewhere in the markets, shares of Lucid (LCID) fell nearly 9%. The electric vehicle maker jumped more than 88% on Friday following speculation that a Saudi public investment fund (PIF) was considering buying its remaining stake in the company.

Shares of Alibaba (BABA) fell 6% on Monday after reports that the Chinese e-commerce site would move its headquarters out of the country, suggesting the new campus could be in Singapore, according to reports.

Shares of SoFi Technologies (SOFI) rose 12.5% ​​on Monday after the digital financial services company released an upbeat earnings forecast for the year ahead.

Shares of Johnson & Johnson (JNJ) fell nearly 4% on Monday after an appeals court ruled the company could not use bankruptcy to end cancer lawsuits.

In the cryptocurrency market, Bitcoin (BTC-USD) fell more than 1% to $23,168 in the past 24 hours, according to CoinMarketCap. However, the biggest token is on course for its best January since 2013, according to Bloomberg, on bets that monetary tightening and the sector crisis are both receding.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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