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US Index Futures Down, Oil Prices Slide – Market Responds to Powell’s Remarks Ahead of Opening Bell

Fernanda T
Latest News
February 05 2024 12:51AM

U.S. index futures are down in Monday’s pre-market, reflecting the impact of Jerome Powell’s statements in a CBS interview on Sunday. The Fed chairman tempered expectations for immediate interest rate cuts, signaling a more cautious approach. This scenario precedes a week full of corporate earnings releases and comes in a context of geopolitical tensions in the Middle East following recent U.S. military actions.

At 05:25 AM, Dow Jones futures (DOWI:DJI) fell 88 points, or 0.23%. S&P 500 futures dropped 0.21%, and Nasdaq-100 futures retreated 0.18%. The yield on 10-year Treasury notes was at 4.089%.

In the commodities market, West Texas Intermediate crude oil for March fell 0.50% to $71.93 per barrel. Brent crude oil for March dropped 0.35%, close to $77.06 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, fell 0.63% to $132.43 per metric ton.

Today’s economic agenda in the U.S. starts at 09:45 AM with the S&P Global report, which will release the revised reading of the Purchasing Managers’ Index (PMI) for January’s service sector activity. At 10:00 AM, the Institute for Supply Management will present the ISM index for January’s service sector activity.

Asian markets ended the session mostly in the red, with the resilience of the Nikkei, which rose 0.54%, standing out. Despite signs of expansion in the Chinese service sector, concerns about China’s economic recovery kept sentiment negative, even with new stimuli from Beijing, such as the reduction in the bank reserve requirement ratio.

European markets are making progress, driven by investors’ reaction to recent statements by the President of the U.S. Federal Reserve and by optimistic financial results presented by major corporations in the region, indicating renewed optimism in the European economic landscape.

Friday’s trading session in the U.S. was marked by a notable rise, driven by favorable results from giants like Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN), as well as a surprisingly positive employment report. With the Dow and S&P 500 reaching new records, the market reflected optimism, overcoming mid-week losses. The Dow Jones rose 0.35% to 38,654.42 points on Friday. The S&P 500 advanced 1.07% to 4,958.61 points, and the Nasdaq increased by 1.74% to 15,628.95 points. The retail sector also stood out, benefiting from the prospect of increased consumer spending, contrasting with the decline in gold and oil stocks due to the fall in the prices of these commodities.

For Monday’s quarterly results, financial reports are scheduled to be presented before the market opens by Caterpillar (NYSE:CAT), McDonald’s (NYSE:MCD), Estée Lauder (NYSE:EL), Tyson Foods (NYSE:TSN), Onsemi (NASDAQ:ON), among others.

After the close, numbers from Palantir Technologies (NYSE:PLTR), NXP Semiconductors (NASDAQ:NXPI), Chegg (NYSE:CHGG), Fabrinet (NYSE:FN), Simon Properties (NYSE:SPG), Symbotic (NASDAQ:SYM), and more are awaited.