U.S. Stock Futures Slip to Start the Week
By Joe Wallace
U.S. stock futures edged down Monday, signaling muted losses for
major indexes at the opening bell after concerns about inflation
whipsawed markets last week.
Futures tied to the S&P 500 ticked down 0.2%. The broad
market gauge retreated over 1.3% last week. Contracts for the Dow
Jones Industrial Average fell 0.3% Monday. Futures on the
technology-heavy Nasdaq-100 edged 0.2% lower.
With earnings season drawing to a close, investors remain
focused on whether a recent jump in inflation will blow over or
become entrenched. A protracted spell of faster growth in consumer
prices could prompt the Federal Reserve to tighten monetary policy,
potentially hurting stocks and other assets that have gained from
low interest rates.
Those concerns last week led the S&P 500 to post its biggest
decline since late February, even after staging a rebound on
Friday. Highflying tech stocks have been particularly vulnerable to
worries about inflation: The Nasdaq Composite has fallen for four
straight weeks, its longest losing streak since August 2019.
"We see this as transitory, but you never know: there is stuff
in here that could take a bit longer," said Lars Skovgaard
Andersen, investment strategist at Danske Bank Wealth Management.
"There will be some volatility in markets still."
In the bond market, the yield on 10-year Treasury notes ticked
down to 1.620%, from 1.639% Friday. Yields fall when bond prices
Quickening inflation has sharpened focus on statements by Fed
officials, who have made the case that the pickup will fade,
allowing the central bank to keep supporting the economy. Vice
Chair Richard Clarida is due to speak at the Federal Reserve Bank
of Atlanta Financial Markets Conference at 10:05 a.m. ET.
Bitcoin dropped 8% to $45,395 after a tweet by Tesla Chief
Executive Elon Musk prompted speculation that the electric-vehicle
maker had sold, or would sell, its holdings of the cryptocurrency.
Mr. Musk later tweeted that Tesla hadn't sold any bitcoin.
Gold futures rose 0.9% to $1,854.30 a troy ounce, their highest
level since the start of February. Money has started to flow back
into the SPDR Gold Trust, the biggest gold-backed exchange-traded
fund, this month.
In overseas markets, the Stoxx Europe 600 ticked down almost
In China, stocks rose after data showed industrial output jumped
9.8% year-over-year in April, beating forecasts, while retail sales
rose by a lower-than-expected 17.7%. The Shanghai Composite Index
The mixed figures suggested China would stick to accommodative
monetary and fiscal policy for now, said David Chao, global market
strategist for Asia Pacific ex-Japan at Invesco. "It is read as a
positive catalyst," he said.
In Taiwan, the benchmark Taiex fell a further 3%, building on a
pullback of more than 8% last week. Over the weekend, authorities
implemented more restrictive measures to combat Covid-19 amid a
spike in new local infections, and on Monday Taiwan reported a
record high of 333 new local cases.
The recent Taiwanese selloff was partly a knee-jerk reaction to
tighter social distancing measures, said Mr. Chao at Invesco. In
addition, he said it reflected an unwinding of margin trading by
individual investors using borrowed money, and a broader rotation
from fast-growing technology stocks to so-called value stocks with
more modest valuations.
Japan's Nikkei 225 lost 0.9% by the close.
Chong Koh Ping in Singapore contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
May 17, 2021 04:49 ET (08:49 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.