Stock Futures Drift Lower After S&P 500’s Eighth Straight Record Close

After another record-breaking afternoon on Wall Street, stock futures opened flat to slightly lower Monday evening.

Contracts on the S&P 500 fell. On Monday, the blue-chip index posted its longest winning run since 2017, setting a new record high and closing over the 4,700 level for the first time ever. The Dow Jones Industrial Average and the Nasdaq Composite both made new highs.

Investors rode a wave of confidence fueled by strong quarterly corporate profits and economic statistics, as well as recent favorable results for Pfizer's (PFE) new COVID-19 antiviral drug and Congress' ratification of a more than $1 trillion infrastructure program. According to FactSet, with 89 percent of S&P 500 businesses having reported quarterly results, the index's forecast profits growth rate is roughly 40 percent. And, over the last few weeks, this growth rate has accelerated as more corporations have exceeded forecasts.

"I continue to believe that it's all about corporate profits." Marci McGregor, senior investment strategist at Bank of America Merrill Lynch, told Yahoo Finance Live, "I know a lot of my peers are concerned that peak earnings growth is behind us." "However, I don't believe peak earnings will occur in 2022." We're witnessing robust consumer demand and a healthy US economy, and I believe a capex cycle will begin in 2022. And I believe that all of this is good for corporate profits, and that this market is supported by it."

After the market closed on Monday, earnings results were mixed. Roblox (RBLX) stock soared more than 20% in late trading after the gaming platform reported third-quarter bookings that above Wall Street's expectations, with the gaming platform increasing even after an initial jump in usage due to stay-at-home parents. However, as investors focused on PayPal's (PYPL) dismal full-year projection, shares of the payments giant fell. This overshadowed the company's announcement of a new Venmo payment partnership with Amazon (AMZN) for next year. Despite exceeding quarterly revenue projections, AMC Entertainment (AMC) dropped in late trade, with the meme stock giving back some gains following a year-to-date increase of 2,000 percent.

A number of corporations have mentioned challenges obtaining raw materials, filling job positions, managing growing input prices, and providing products and services to end customers in quarterly reports and analyst calls. Supply chain comments on quarterly earnings calls have increased by 360 percent year over year, according to Bank of America, illustrating the broad nature of these challenges. These supply-related difficulties have also contributed to inflationary tendencies that are still high. The Bureau of Labor Statistics' Producer Price Index for November is likely to reveal that producer prices grew 8.6% over the previous year, matching October's pace for the quickest on record in records dating back to November 2010.

"By the middle of 2022, I believe inflation will have reached its pinnacle." "It should stay elevated in the first half of 2022, but it should fall in the second half," Kristina Hooper, Invesco's chief global market strategist, told Yahoo Finance Live. "While this is undoubtedly a problem, it is part of what we should expect from the epidemic.

"We've gotten out of a blazing structure," Hooper explained, "but we should expect some smoke and water damage as a result." "That's exactly what we're seeing with rising prices and supply chain issues right now."