S&P 500 futures were stable in early morning trading Monday as investors digested the S&P 500 record high a week ago with an important meeting of the Federal Reserve.
Dow Jones Industrial average futures rose 11 points. S&P 500 futures were flat.
The Nasdaq 100 futures were the relatively standout performer, up 0.2%.
Investors give growth and technology stocks another chance as bond yields plummet. US 10-year Treasuries fell below 1.43% on Friday, a three-month low. Cathie Woods Ark Innovation, an ETF focused on disruptive technologies, returned around 6% last week.
Tesla CEO Elon Musk boosted sentiment in the cryptocurrency, saying on Sunday that the company will resume Bitcoin transactions once it confirms miners are using reasonable clean energy consumption. Bitcoin rebounded above $ 39,000 on the news.
Tesla, also a big holder of Bitcoin, gained about 1% in pre-market trading. Other major tech stocks like Nvidia and Zoom also gained in pre-trading hours.
The Fed’s two-day monetary policy meeting is likely to dominate investor behavior this week. Even if the central bank is not expected to take any action, its forecasts on interest rates, inflation and the economy could move the markets. The Fed could potentially raise its rate hike forecast after saying in its last quarterly update that it would keep its key rate near zero through 2023, the Wall Street Journal reported on Monday.
Fed chairman Jerome Powell speaks to the press after the central bank released its statement Wednesday, and traders will analyze his comments for clues as to when the Fed might begin to end its aggressive monthly asset purchases, especially given the recent one Inflation that was hotter than expected readings.
“In light of the recent oversized inflation reports, this week’s Federal Reserve meeting will be scrutinized for any tell-tale evidence that the Fed’s schedule is moving forward to either hike rates or cut QE,” said Jim Paulsen, chief investment strategist at the Leuthold Group, said CNBC.
“Any evidence to suggest that monetary tightening is proceeding is likely to create volatility in the equity market,” added Paulsen.
US stocks closed last week with a record closing high for the S&P 500 and beginning a rotation back into growth stocks.
Last week, the 30 stocks Dow Jones Industrial Average fell 0.8%, but the S&P 500 rose 0.4% for the third positive week in a row. The Nasdaq Composite outperformed nearly 1.9% for its fourth consecutive week of success as tech trading came back into fashion.
“As the S&P 500 index hit another new record high last week, investors will be watching to see if this signals higher levels in the short term,” said Paulsen.
Meme stocks also got attention last week. AMC Entertainment, Clover Health Investments, GameStop, and more experienced volatile trading as the group continued to attract the attention of social media investors on Reddit.
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– with reports from CNBC’s Patti Domm.
