US Stock Futures Lower After a Record-Setting Friday Session

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Key Takeaways

• Futures on Wall Street headed for a lower open following Friday’s all-time highs
• Investors bring high hopes for the earnings season that kicks into gear this week

Stock futures on Wall Street traded moderately lower in pre-market hours ahead of Monday’s opening bell in New York. Futures on the Dow Jones fell about 120 points, while S&P futures and Nasdaq futures declined about 12 and 10 points, respectively.

Monday’s subdued futures trading came after a volatile session that pushed all three major indexes to record highs on Friday. The sharp upside swing on the last trading day in the previous week was a sharp U-turn from a heavy sell-off on Thursday as market participants offloaded risk prompted by concerns about a slowdown in the US economic recovery.

Friday’s rally pulled the major stock benchmarks out of the red for the week. Moreover, as all pared losses, the Dow gained 0.24% over the week, while the S&P500 and the Nasdaq Composite each advanced by roughly 0.4% for the same period.

Stocks that were most affected by Thursday’s significant market decline pushed higher on Friday. Economically sensitive shares rebounded, such as banking shares, which jumped about 3%. Travel-and-leisure shares also advanced with airline companies leading the gains.

In numbers, investors were able to reverse the market sentiment, resulting in a gain of nearly 500 points for the 30-stock Dow Jones Industrial Average. The blue-chip index added 448.30 points, or 1.30%, to close at a fresh record of 34,870.16. The S&P500 advanced 48.73 points, or 1.13%, to 4,369.55, also a record high. The Nasdaq Composite climbed 142.13 points, or 0.98%, to notch a new all-time high of 14,701.92.

Large-Scale Banking Firms Report This Week

The record closings for the major stock gauges came right in time for the start of the quarterly earnings season. High expectations are most likely to define this quarter’s earnings reports as S&P500 companies have a high bar to clear. Economists forecast companies from the broad-market index to reach profits as much as 65% higher compared with the same quarter a year ago.

Banking firms will kick off the financial reports this week. JPMorgan Chase and Goldman Sachs report quarterly results on Tuesday. Bank of America, Citigroup, and Wells Fargo are set for Wednesday. They will be joined by BlackRock, the largest asset manager in the world. Morgan Stanley reports on Thursday.

Additionally, investors expect economic updates to partly define the movement in stocks this week. Key inflation reports on Tuesday and Wednesday will be closely monitored by the market to see whether higher prices continue to leave a more permanent footprint on the economy. June’s retail sales data on Friday will also provide some clarity and insight on the pace of economic recovery.

European markets today opened in negative territory as investors continue to watch how the economic recovery is unfolding across the old continent. The region-wide Stoxx Europe 600 is hovering right under the flatline on Monday, down about 0.20%.

On the cryptocurrency front, Bitcoin kicked into gear this week by advancing some 2% on the day. The largest digital currency reached a session high of $34,600 and is poised for a second straight day of gains. Ether is also trading higher today, up over 2% to $2,150 per token.