October 3, 2022

Raven Tribune

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S&P 500 futures fell inches ahead of the Federal Reserve's September meeting this week

Stock selling set to continue Monday with Dow futures dropping 200 points as prices rise

Traders work on the floor of the New York Stock Exchange during the afternoon trading session on September 13, 2022 in New York City.

Michael M. Santiago | Getty Images News | Getty Images

Stock futures pointed to further losses on Monday – after the worst week for major averages since June – as interest rates rose ahead of this week’s two-day Federal Reserve meeting.

Futures linked to the Dow Jones Industrial Average were down 260 points, or 0.84%. S&P 500 and Nasdaq 100 futures fell 0.9% and 1%, respectively.

The 10-year Treasury yield exceeded 3.5% on Monday, an 11-year high, and rates across the board continued to rise ahead of the Federal Reserve’s likely decision this week to raise its benchmark interest rate by another three-quarters of a point until snuff. from inflation. After some brief hope over the summer that the Fed would crack down soon, investors are beginning to flood stocks again with fears that the central bank will go too far and push the economy into recession.

Investors come into the new week with an eye on the Federal Reserve’s latest policy meeting, which begins on Tuesday. The central bank is expected to raise interest rates by another three-quarters of a point, although investors are also watching for guidance on corporate earnings before the next reporting season begins in October.

“As we head towards the end of 2022, we continue to anticipate choppy conditions in US stocks, which we see are caught in a tug of war between deep bearish sentiment (conflicting/bullish signal) and ongoing concerns about further Fed tightening and the long-term economic fallout and earnings revisions.” RBC Capital Markets’ Laurie Calvasina wrote in a note to clients on Monday.

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Stocks fell last week as investors reacted to a hotter-than-expected inflation report and FedEx’s dismal warning about the “significantly deteriorating” global economy. The major averages posted their fourth weekly loss in five weeks.

Away from the Federal Reserve meeting, there are quite a few economic data released this week, including the preliminary homes for August on Tuesday and initial jobless claims on Thursday.

There are also a few dividend companies on deck, including Costco, Darden Restaurants, General Mills, and Lennar.

CNBC’s Patti Doom contributed to this report.