Key points:
Futures tracking the S&P 500 and Dow remained stable on Monday, while Nasdaq futures dipped as traders anticipated earnings reports that could either halt Wall Street’s recent rally or fuel it to new record highs.
Dow E-minis gained 18 points (0.04%), S&P 500 E-minis dropped 4.75 points (0.08%), and Nasdaq 100 E-minis slipped by 46.5 points (0.22%).
Picture: SP500 pulls back to 5862.22, with bearish momentum building as seen on the VT Markets app.
The SP500 chart closed at 5862.22, reflecting a drop of 0.27% for the session. The price reached a high of 5880.98 before pulling back, and the low of the day was 5857.85.
Moving averages (5, 10, 30-period) are beginning to align downward, which indicates the emergence of bearish momentum.
The MACD shows a bearish crossover, as the MACD line has moved below the signal line, with expanding negative histogram bars confirming the building selling pressure.
In premarket trading, Boeing shares jumped 3.9% as news broke of a potential worker deal to end a five-week strike, which weighed on the company.
Boeing is expected to report its results later this week, alongside heavyweights such as IBM, Tesla, and Coca-Cola. The chip sector will also be closely monitored as Texas Instruments prepares to announce its earnings.
The broader earnings season has so far been promising, with 83.1% of S&P 500 companies surpassing earnings expectations, outperforming the four-quarter average of 79.1%, according to LSEG data.
This strong performance, coupled with favourable economic data and hope for Federal Reserve rate cuts, has kept indices on an upward trend, bringing the S&P 500 within reach of the 6,000-point mark for the first time.
Both the Dow Jones Industrial Average and the S&P 500 closed at record highs on Friday, continuing a six-week winning streak.
The Nasdaq also enjoyed its longest rally of the year, despite mounting concerns over geopolitical instability in the Middle East, rising Treasury yields, and the impending U.S. presidential election.
Investor sentiment appears resilient as polls show former President Donald Trump gaining ground in the election race.
Stocks expected to benefit from a Trump victory, such as those tied to the dollar, bitcoin, and gold, have gained support in recent sessions.
Analysts at SEB noted that stock markets continue to perform well despite uncertainties surrounding the U.S. election, which could persist until election night.
See also: Dollar Climbs with U.S. Yields; Bitcoin Surges
Among individual stocks, Spirit Airlines surged 45% following news of an agreement to extend its debt refinancing deadline by two months, giving the airline more breathing room.
On the economic front, key data released this week include home sales, flash PMIs, and durable goods orders. The Federal Reserve’s Beige Book, scheduled for release, will also draw attention as market participants assess the economic outlook.
Several Federal Reserve officials are slated to speak throughout the day, including Lorie Logan, Neel Kashkari, Jeffrey Schmid, and Mary Daly.
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