S&P 500 futures were barely changed Sunday night as investors awaited a batch of key earnings reports and a major policy decision from the Federal Reserve.
Broad Market Index-Linked Futures marked down by 0.07%. Dow Jones Industrial Average Futures they were inferior in 37 points. nasdaq 100 futures rose 0.03%.
Friday the blue chip Dow it earned a 2.51 point gain, finishing higher for the 10th straight day and marking its longest rally since 2017. S&P 500 ended the week up 0.7% to 4,536.34, while the Nasdaq Composite it fell 0.6% in the same period to 14,032.81.
“Investor sentiment seems to be turning slightly bearish, so we won’t be surprised to see the market trend flat or down as investors consider selling some of their investments and pocketing some of the good gains they’ve made this year,” said Noah Hamman, CEO of AdvisorShares.
Fundstrat’s Tom Lee agreed that profit-taking will be “part of the investor mindset,” particularly for those enjoying “terrific” YTD returns from tech stocks and FAANG.
“That doesn’t mean that when they make a profit, they necessarily have to get out of the market,” he told CNBC’s Closing Bell: Overtime on Friday. “If the Fed surprises us in any way because it’s more of a dovish pause, I think investors will look for ways to find stocks that rise as financial conditions ease,” he said. “They may not go back to the FAANG. They may stay with the technology, but they could expand into industry and finance. So yes, profit taking, but that doesn’t mean the market has to go down.”
Investors anticipate the Fed to raise rates by a quarter of a percentage point at the conclusion of its meeting on Wednesday and will listen to comments from Chairman Jerome Powell to get an idea of the central bank’s position on what happens next as it tries to navigate a soft landing for the economy.
They’re also keeping an eye on the personal consumption expenditures index, the Fed’s preferred inflation gauge, due for release at the end of the week.
Next week will also be the busiest of the earnings season, with Thursday being the busiest day. About 40% of the Dow Jones and 30% of the S&P 500 will give their financial updates throughout the week, including Alphabet, Microsoft and Meta. Several big pharmaceutical companies are preparing to report and it’s a big week for industrial companies and big oil too.
—CNBC’s Robert Hum and Sarah Min contributed reporting.