S&P 500 futures struggle after Friday’s 1.5% selloff
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The S&P 500 futures remain tepid as traders digest the sharp drop on Friday, which erased gains made since Election Day. A stronger-than-expected labor market report has shaken expectations of further Federal Reserve rate cuts.
S&P 500 erases Election Day gains
The S&P 500 futures wavered near the flatline on Monday after a punishing session last Friday wiped out 100 points from the index, marking a 1.5% decline. This drop neutralized the post-Election Day rally that initially lifted equities to record highs, driven by optimism around the policies of President-elect Donald Trump.
If the current performance holds, the period from Election Day to Inauguration Day could see its worst market performance since 2009, highlighting the fragile state of investor sentiment amidst heightened economic uncertainties.
December jobs data: a double-edged sword
The Non Farm Payrolls report for December showed an unexpected surge, with 256,000 new jobs added compared to the forecasted 156,000. While robust labor market growth reflects a resilient economy, it has also cast doubts on the likelihood of aggressive rate cuts by the Federal Reserve in 2025. Rising borrowing costs have reignited concerns for equity valuations, particularly in sectors sensitive to interest rate adjustments.
Market outlook: key economic data ahead
The week ahead is packed with critical economic reports that could further influence market dynamics:
Wholesale inflation (PPI)
The Producer Price Index (PPI) will offer insights into inflationary pressures from the supply side, with potential implications for Fed policy.
Retail inflation (CPI)
Consumer Price Index (CPI) data on Wednesday will be crucial in gauging how inflation trends are shaping up amid Trump’s pro-growth policies.
Consumer spending (retail sales)
Thursday’s retail sales report will reveal the strength of consumer demand, a key driver of the US economy.
Trading strategy: prepare for volatility
Focus on key sectors
Watch interest rate-sensitive sectors, such as real estate and utilities, which could see significant movement based on the inflation data.
Opportunities in consumer discretionary
Retail sales data may provide trading opportunities in consumer-focused stocks, especially as holiday season spending trends become clearer.
Brace for market swings
With multiple high-impact reports on the horizon, volatility is expected to remain elevated. Traders should adjust their strategies accordingly to capitalize on potential market moves.
Conclusion: navigating a tumultuous start to 2025
As the S&P 500 struggles to regain its footing, investors are bracing for a pivotal week filled with critical economic data. While the labor market strength has dampened hopes of aggressive rate cuts, the upcoming reports could provide a clearer picture of the economy’s trajectory and set the stage for trading opportunities in the days ahead.
S&P 500 erases Election Day gains
The S&P 500 futures wavered near the flatline on Monday after a punishing session last Friday wiped out 100 points from the index, marking a 1.5% decline. This drop neutralized the post-Election Day rally that initially lifted equities to record highs, driven by optimism around the policies of President-elect Donald Trump.
If the current performance holds, the period from Election Day to Inauguration Day could see its worst market performance since 2009, highlighting the fragile state of investor sentiment amidst heightened economic uncertainties.
December jobs data: a double-edged sword
The Non Farm Payrolls report for December showed an unexpected surge, with 256,000 new jobs added compared to the forecasted 156,000. While robust labor market growth reflects a resilient economy, it has also cast doubts on the likelihood of aggressive rate cuts by the Federal Reserve in 2025. Rising borrowing costs have reignited concerns for equity valuations, particularly in sectors sensitive to interest rate adjustments.
Market outlook: key economic data ahead
The week ahead is packed with critical economic reports that could further influence market dynamics:
Wholesale inflation (PPI)
The Producer Price Index (PPI) will offer insights into inflationary pressures from the supply side, with potential implications for Fed policy.
Retail inflation (CPI)
Consumer Price Index (CPI) data on Wednesday will be crucial in gauging how inflation trends are shaping up amid Trump’s pro-growth policies.
Consumer spending (retail sales)
Thursday’s retail sales report will reveal the strength of consumer demand, a key driver of the US economy.
Trading strategy: prepare for volatility
Focus on key sectors
Watch interest rate-sensitive sectors, such as real estate and utilities, which could see significant movement based on the inflation data.
Opportunities in consumer discretionary
Retail sales data may provide trading opportunities in consumer-focused stocks, especially as holiday season spending trends become clearer.
Brace for market swings
With multiple high-impact reports on the horizon, volatility is expected to remain elevated. Traders should adjust their strategies accordingly to capitalize on potential market moves.
Conclusion: navigating a tumultuous start to 2025
As the S&P 500 struggles to regain its footing, investors are bracing for a pivotal week filled with critical economic data. While the labor market strength has dampened hopes of aggressive rate cuts, the upcoming reports could provide a clearer picture of the economy’s trajectory and set the stage for trading opportunities in the days ahead.