Credit: Unsplash
The start of the new week sees stock futures exhibiting little change following a recent market pullback, which occurred as the rally in 2024 took a momentary pause.
Last week witnessed a decline across major indices, with the 30-stock Dow experiencing a 2.3% decrease, marking its worst weekly performance since March 2023. Similarly, the S&P 500 registered a nearly 1% drop, its most substantial weekly loss since early January, while the Nasdaq Composite dipped by 0.8%, marking its fourth negative week out of the last five.
Despite the overall downward trend, the market concluded last week on a positive note, buoyed by a stronger-than-expected jobs report on Friday. The unexpected increase in payrolls instilled confidence among investors, suggesting that a robust economy could continue to support corporate earnings growth, even amidst the possibility of extended higher interest rates.
Bill Adams, Chief Economist at Comerica Bank, remarked, “Jobs and wages are rising solidly, and aggregate payrolls are outpacing inflation, which will keep Americans spending in 2024 and powering the economy forward.”
As investors seek further insights into the Federal Reserve’s efforts to combat inflation, they eagerly await the release of consumer and producer price indexes for March later this week.
Economists surveyed by Dow Jones anticipate the CPI (Consumer Price Index) to rise by 0.3% last month, with a year-over-year increase of 3.5%, with the report scheduled for release on Wednesday morning.
Adam Crisafulli, Founder of Vital Knowledge, emphasized the importance of inflationary data, stating, “The Fed seems unbothered by robust employment gains… Inflation, though, is a bigger issue, and it’s imperative that the March price data (CPI, PPI, PCE) show the disinflationary process getting back on track.”
Additionally, investors are contending with escalating bond yields and oil prices. The benchmark 10-year Treasury yield surged by nearly 20 basis points last week to approximately 4.4%, while U.S. crude oil prices reached $87 amid ongoing geopolitical tensions.
