Traders work on the floor of the New York Stock Exchange (NYSE) on July 20, 2023 in New York City.
Brendan McDermid | Portal
U.S. stock futures were little changed on Sunday as investors awaited the latest reading of the Federal Reserve's preferred inflation rate as well as a series of key earnings reports.
Futures tied to the Dow Jones Industrial Average fell 0.04%, while S&P 500 futures and Nasdaq 100 futures fell 0.04% and 0.05%, respectively.
Stocks are entering the final week of February on a high note after major indexes hit new milestones on Friday, posting winning weeks with the help of Nvidia's blockbuster results. The blue-chip Dow Jones closed at an all-time high of 39,131.53, the broad market S&P broke 5,100 for the first time at one point in the session and the tech-heavy Nasdaq Composite hit a 52-week high in Friday's session.
Investors are now paying attention to whether the AI momentum can continue as economic and inflation risks remain. With this in mind, they are also looking at the monthly personal consumption expenditure price index, the Fed's preferred inflation indicator, which will be released on Thursday.
“Nvidia was the gift that keeps on giving this past week with blockbuster earnings reports that boosted semis, tech and the broader market. With the market now up over 20% since its October 2023 low, we expect the market to ease.” “At some point there will be a breather,” Stephanie Lang, chief investment officer at Homrich Berg, told CNBC. “A hotter-than-expected PCE report this week could be a data point that could dampen market enthusiasm.”
“So far, stocks have ignored the Fed's hawkish tone as the AI halo takes center stage, but the market is betting on the Fed staging a soft landing, and the longer the Fed waits, the greater the risk of a happy ending .” ” She added. “Still, the Fed is clear that it wants to avoid a repeat of the gradual tightening of interest rates in the 1970s, when it failed to control inflation. That's why they're staying patiently and making sure they have completed their task.”
There are a number of economic releases, including January long-lived orders data on Tuesday and January wholesale inventory levels on Wednesday.
Elsewhere, corporate earnings are falling, but several hot names are reporting next week, which could give investors better insight into the state of technology and consumers.
Salesforce is the big name in tech this week; The report is due on Wednesday. Also on deck are restaurants and several major retailers, as well as Norwegian Cruise, AMC Entertainment, JM Smucker, Hormel and Anheuser-Busch.