Stock futures were slightly lower on Monday morning after U.S. Federal Reserve Chair Jerome Powell dashed investor hopes for interest rate cuts in the near term. Futures tied to the S&P 500 dipped nearly 0.3%. Futures for the Dow Jones Industrial Average fell 100 points, or 0.25%, while Nasdaq-100 futures edged down 0.2%. “We want to see more evidence that inflation is moving sustainably down to 2%,” Powell said in an interview with “60 Minutes” that aired Sunday. “Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates.” Those comments echo remarks made by Powell last week, after the Fed’s most recent monetary policy meeting. After the Fed kept interest rates unchanged, Powell said that a rate cut in March was unlikely. Elsewhere, earnings season stretched on, with McDonald’s shares slipping nearly 1% before the bell after posting mixed quarterly results. Caterpillar shares popped more than 4% after posting strong profits. Monday’s moves come after the three major averages rose for the 13th week out of 14, powered by a stronger-than-expected January jobs report and solid earnings reports from Microsoft and Meta Platforms. “The fundamental narrative survived a robust stress test this week and it’s hard to poke a hole in either the earnings power of US tech or the broader growth/inflation tradeoff … the tactical setup, however, looks demanding and I’m a bit doubtful the next few months will sustain the same degree of upside torque that we witnessed in the past few months,” Tony Pasquariello, global head of hedge fund coverage at Goldman Sachs, said in a note to clients on Saturday. This week has another full slate of earnings, including McDonald’s on Monday and Ford on Tuesday. Traders will also be keeping an eye on the Middle East, where the U.S. began airstrikes in Iraq and Syria on Friday. National security adviser Jake Sullivan told NBC News’ “Meet the Press” on Sunday that the U.S. plans to make “additional strikes” against Iran-backed groups. U.S. Treasury yields were higher on Monday as investors weighed the path ahead for interest rates following comments from Federal Reserve Chair Jerome Powell. At 6:29 a.m. ET, the yield on the 10-year Treasury was up by 5 basis points at 4.081%. The 2-year Treasury yield was last more than 6 basis points higher at 4.435%. China stocks reversed losses on Monday, rebounding off five-year lows, while most Asia markets kickstarted the holiday-shortened week largely lower on fears of higher-for-longer interest rates. Hong Kong’s Hang Seng index ended nearly flat, while mainland China’s CSI 300 climbed 0.65% to 3,200.42, reversing losses from earlier in the day. The Caixin survey on services sector activity in China showed a softer expansion for January, compared to December. South Korea’s Kospi dropped 0.73%, dragged by losses in heavyweight Samsung Electronics and the small-cap Kosdaq fell 0.79%. In Australia, the S&P/ASX 200 fell 0.95% to close at 7,625.9, retreating from its all-time high set on Friday. Markets also awaited an interest rate decision from the Reserve Bank of Australia on Tuesday. In contrast, Japan’s Nikkei 225 climbed 0.54% to end at 36,354.16, while the broader Topix rose 0.67% to close at 2,556.71. China, Taiwan, South Korea, Singapore, and Hong Kong will all see shortened trading weeks as the Lunar New Year approaches. Oil prices were largely flat Monday as the Federal Reserve moves carefully on interest rates cuts, and the U.S. pushes for an extended pause in the Israel-Hamas War. The West Texas Intermediate contract for March dropped 31 cents, or 0.46%, to trade at $71.95 a barrel Monday morning. The Brent contract for April was down 17 cents, or 0.22%, to trade at $77.16 a barrel. Gold prices slipped to a one-week low on Monday after a robust U.S. jobs data last week and remarks from Federal Reserve Chair Jerome Powell dented hopes for early rate cuts, lifting the dollar and bond yields higher. Spot gold was down 0.6% at $2,025.99 per ounce by 1214 GMT, hitting its lowest since Jan. 29. U.S. gold futures fell 0.6% to $2,042.60 per ounce.
Roodeweg 222, Willemstad, Curaçao