Stock futures fell to begin the week on Sunday night. This could portend a challenging week ahead for investors coming off a second consecutive week of steep losses on Wall Street. Even the Dow Jones Industrial Average, down just 201 points or about 0.5%, notched its third-straight down session. The S&P 500 futures fell back by 0.5%, and Nasdaq-100 futures fell 0.6%.
Last week was pretty brutal on the markets. Indeed, both the Dow Jones and Nasdaq Composite plunged more than 2% during the four-day trading week. The U.S. stock market is closed on Friday for Good Friday. This temporary closure increased observance on this coming trading week, as investors sort through the recent barrage of economic signalling and corporate-earning complaint statements.
In a CBS interview the other day Chicago Federal Reserve President Austan Goolsbee showed that even he is worried about potential tariffs. He cautioned that such steps risk making U.S. economic activity “fall off” in the summer. Fed Chair Jerome Powell has repeatedly highlighted the dislocations these taxes engender. He warned that they might undermine the Federal Reserve’s independence, limit their capacity to fight inflation, and contribute to economic stagnation.
Investor sentiment was already rattled after shares of Nvidia tanked on the heels of Microsoft’s quarterly report, resulting in Nvidia shares losing nearly 3% today. During the last trading session in which Nvidia traded, its shares tumbled almost 7%. The plunge followed the company’s release of poor quarterly earnings and a revision of its full-year guidance downward. This downturn played a larger role on the Dow’s overall performance, adding to the weight bearing down on the Dow.
As we noted on Friday, this enormous drop from UnitedHealth Group was a major factor weighing down the Dow on Thursday. Secondly, investors picked apart the company’s recent earnings performance, further weighing down the index. The combination of negative news from key corporations and economic uncertainties has left traders apprehensive about future market movements.
So as trading resumes this week all eyes will turn to the implications for inflation and economic growth. Further, they will be looking for signs of inflation in upcoming corporate earnings reports that could affect how stocks perform.