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19 Jul 2021
3 min read

Dow Futures Fall Nearly 200 Points After a Losing Week

Dow Futures Fall Nearly 200 Points After a Losing Week

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Key Takeaways

  • US equity futures slide as indexes are poised to extend last week’s descend
  • Inflation concerns and Delta virus woes weigh on the market sentiment

Futures markets in the US are showing further losses across the benchmark stock gauges on Monday after investors weren’t able to end last week’s trading in the green. Dow futures are lower by about 180 points, while S&P futures and Nasdaq futures are lower by roughly 0.35%, and 0.15%, respectively.

Major stock indexes posted their worst weekly performance in more than a month, pressured by mixed signals from the Fed and looming Delta strain cases globally.

The first negative week in four coincided with the unfolding of the earnings season. Banking firms delivered stellar second-quarter financial results, boosted by a strong economic recovery that saw consumer spending and deal-making return.

Despite the stronger-than-expected results from a wide range of S&P500 companies, the Dow Jones and the S&P500 fell 0.52%, and 0.97% for the week, respectively. The tech-heavy Nasdaq Composite slid the most, ending the week 1.87% to the downside, its worst week since May.

Snapping a three-week winning stretch, the Dow Jones Industrial Average on Friday dropped 299.17 points, or 0.86%, to 34,687.85. The broad S&P500 index declined 32.87 points, or 0.75%, to 4,327.16. The Nasdaq Composite lost 115.90 points, or 0.80%, to finish the Friday session at 14,427.24.

Reporting Season Continues

Renewed inflation jitters weighed on stocks across the board after the June consumer-price data showed inflation spiked 5.4% over the last 12 months. The report spooked investors, prompting them to offload risk. Despite the looming inflation pressures, Federal Reserve Chair Jay Powell attempted to soothe market participants. Therefore, he reiterated that inflation is a result of price increases in a relatively narrow range of goods and services. The Fed Chair, speaking before Congress, said the US central bank viewed higher prices as transitory and expected them to moderate as the economy continued to recover.

Looking ahead into the week, a busy time of earnings is on the agenda. Nine Dow components are set to report financial results for the second trimester of 2021. From the S&P500, 76 companies will report quarterly updates. Some of the big names include United Airlines and American Airlines, social media giant Twitter, Coca-Cola, and vaccine maker Johnson & Johnson. Software firm IBM and streaming company Netflix is also on the list.

For the month, choppy trading has been narrating the movements in stocks across sectors. The monthly performance for the Nasdaq is negative by 0.50%. The Dow Jones and the S&P500 are in positive territory, up 0.70%, and 0.50%, respectively.

The composition of recent data has suggested that economically sensitive stocks, also called value stocks, or cyclical, have performed better compared to other sectors, such as technology.

Stuck Between the Pandemic and a Hard Place

Overseas, European markets opened the working week with moderate declines. The downbeat mood is a continuation of last week’s market performance. Consumer spending pressures and Delta worries have dampened the positive sentiment.

In the UK, the nation is now free from almost every Covid-19 restriction as the government scrapped social distancing rules and mandatory mask-wearing to allow the reopening of the economy. The decision comes at a time when the UK is seeing a rapid increase of coronavirus infections that reaches as high as 50,000 cases a day.

On the cryptocurrency front, bitcoin and altcoins maintained their flat trading over the weekend. Uneventful start of the week today has seen bitcoin hover unchanged at $31,800. Ether, the second-largest digital currency, is trading right above the $1,900-mark, also flat on the day.

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