US Index Futures Decline After Record Highs for Dow, S&P500

16 Aug 2021 · 3rd Party Analysis

US Index Futures Decline After Record Highs for Dow, S&P500

WRITTEN BY ThorFX

In Summary

  • Stock futures drop on Monday as investors retreat from record levels for Dow and S&P500
  • European markets slide after a strong rally last week pushed the Stoxx 600 to a fresh high

Futures contracts tied to the major stock averages tumbled in pre-market activity on Monday. Ahead of the opening bell in New York, Dow futures slipped over 150 points at one moment, but later recovered a bit and are currently hovering lower by roughly 70 points.

S&P500 futures were also pressured early Monday, down about 8 points. And Nasdaq Composite futures were relatively flat. All three main stock gauges look set to open the day in negative territory after a record run in the previous week. The slide in overnight trading followed a set of record closing levels for the Dow Jones and the broad-based S&P500. 

The blue-chip index ended last week at 35,515.38, a new all-time high for the Dow and its fourth straight record close. The S&P500 finished the day at 4,468.00, also notching its highest-ever finish. The Nasdaq Composite realized a mild gain of about 7 points to close the day in the green at 14,822.90.

Investors last week cheered positive economic data along with a strong wave of earnings reports. The Labor Department said Thursday that initial jobless claims fell to 375,000, matching estimates. In addition, Airbnb and Disney reported earnings that came in better than expected. 

Consumer sentiment, on the other hand, plunged to its lowest level since 2011. The drop, according to analysts, indicated Americans grew more concerned about the prospects for recovery, inflation and a surge in Delta strain cases.

Market participants this week will be focused on a flurry of economic reports and key events. Upcoming data includes an update on retail sales figures on Tuesday. Wednesday is set for the release of the Federal Reserve’s minutes from their latest meeting three weeks ago. 

Federal Reserve considers relaxing politics, Cryptos slow down

Fed officials, in their July 27-28 policy meeting, deepened discussions over unwinding the ultra-loose monetary policy that has sustained the solid growth of the stock market since March 2020. 

In the minutes, traders and investors will be looking for clues about when and how does the US central bank intend to start scaling down its ample monetary stimulus. They will also scrutinize the print for Fed’s stance on the looming inflationary pressures. 

A few dozens of companies are still left to report their quarterly earnings this week. Among them, Cisco, NVIDIA and Walmart. So far, nearly 90% of the S&P500 companies have reported positive earnings per share for the quarter ended June. 

European markets this week opened for trading slightly to the downside. Stock indexes in Europe registered record highs last week, with the region-wide Stoxx Europe 600 logging its tenth straight day of gains on Friday. The pan-European stock gauge set a record close of 475.83 to finish its fourth consecutive week of gains.

In cryptocurrency action, bitcoin and alternative coins are trading higher on Monday. After a slight setback over the weekend, the orange coin today has added about 2% to its price and is currently changing hands at levels around $47,500. Ether is also higher on the day, currently slightly below $3,280. 

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