Stock Market News Live Updates: Stock Futures Open Lower After S&P 500 Posts Worst Month Since March 2020
Jan 31, 2022
Futures on Wall Street's major indexes fell just below the break-even point in post-market trade on Monday, after equities rose previously in the session to end an extremely turbulent January in positive.
Equities on the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite were trading below the flatline as the market went into overnight trading. Previously in the day, the S&P 500 had its weakest monthly results since March 2020, while the Nasdaq Composite just averted perhaps the worst January in history, owing to a worsening collapse in tech companies fueled by rate-rise fears.
Concerns over how soon and considerably the Fed would raise interest rates have resulted in a tumultuous period for stocks, as investors sell growth stocks that are vulnerable in a higher-interest-rate climate. The S&P 500 finished January roughly 6% weaker, the Dow Jones Industrial Average dropped 4%, and the Nasdaq was down 10%.
Markets are preparing for a 25-basis-point increase next month after Federal Reserve Chairman Jerome Powell said the previous week that a hike in interest rates beyond their current near-zero level was probable in March as officials seek tighter financial regulations despite rising inflation.
"Investors are keeping an eye on the central bank," said Jeff Klingelhofer, co-head of investments at Thornburg Investment Management. "We are unquestionably in a period of immense instability, and we believe it will last for some longer."
Despite a volatile January, history shows that purchasing equities following large drops have benefited well. According to a new analysis from Goldman Sachs analyst David Kostin, an investor purchasing the S&P 500 10% below its peak, regardless of whether it was the trough, would have earned an average gain of 15% over the following 12 months.
"The 'buy-the-dip' term has two components: buy the dips and sell the rips," explained Interactive Brokers chief strategist Steve Sosnick. "I believe you will have the chance to accomplish both in this setting."
Monday kicked off a busy week for this income season, with more than 100 S&P 500 businesses slated to publish fourth-quarter numbers on Friday. Alphabet is slated to release numbers after the bell on Tuesday, with Amazon and Meta Platforms (former Facebook) following suit later in the week.
On the economic stage, investors will be looking for new readings on industries and unemployment on Tuesday. The new Job Openings and Labor Turnover Survey (JOLTS) figures will be released by the U.S. Bureau of Labor Statistics on Tuesday, providing a new picture of the job market's resurgence.