Dow futures fell 200 factors after the index’s worst week since October

Traders on the floor of the New York Stock Exchange, June 18, 2021.

Source: NYSE

Stock futures fell on Sunday evening after the Dow had its worst week since October.

Futures on the Dow Jones Industrial Average fell 182 points. S&P 500 futures and Nasdaq 100 futures both traded in negative territory as well.

US stocks fell Friday as investors digested new Federal Reserve economic forecasts and worried rate hikes could come earlier than expected.

The Fed raised its inflation expectations on Wednesday and forecast interest rate hikes for 2023. St. Louis Fed President Jim Bullard said Friday in CNBC’s “Squawk Box” that it was natural for the central bank to lean a little more “Hawk” and see higher rates starting in 2022.

The Dow fell 3.5% last week while the S&P 500 and Nasdaq fell 1.9% and 0.2%, respectively, over the course of the week.

Sectors tied to the economic recovery drove the dip last week. The S&P 500’s financial and raw materials sectors lost more than 6% for the week, while the energy sector lost more than 5% and industrials fell more than 3%.

CNBC Pro’s Stock Picks and Investment Trends:

“Investors may interpret the Fed’s restrictive bias on Wednesday as a sign that extensive post-pandemic US economic expansion may be a little more difficult to achieve in what may be an emerging environment of less expansionary monetary policy,” Goldman Sachs’ Chris Hussey said in a press release .

The yield curve for government bonds also flattened last week. Yields on shorter-term government bonds such as the 2-year bond rose – reflecting expectations for the Fed rate hike. Longer-term returns like the 10-year note fell – a sign of less optimism about economic growth.

Investors await public appearances from Fed members on Monday. Bullard and Dallas Fed President Robert Kaplan will speak virtually at a forum at the Official Monetary and Financial Institution at 9:00 am ET. New York Fed President John Williams is expected to speak at an event organized by the Midsize Bank Coalition of America on Monday afternoon.

Leave a Reply

Your email address will not be published. Required fields are marked *