US stock futures fell on Friday morning, signaling a potential losing week for the major indexes, as the post-election rally showed signs of fading and the Federal Reserve dampened expectations for immediate interest rate cuts, CNBC reports.
Futures linked to the Dow Jones Industrial Average dropped by 156 points, or 0.36%. S&P 500 futures fell about 0.51%, while Nasdaq 100 futures shed 0.76%, reflecting a broad pullback in US equity markets.
The decline comes after a weak performance on Wall Street Thursday, where the Dow Jones lost more than 200 points and both the S&P 500 and Nasdaq Composite slid roughly 0.6%. The downward momentum was fueled by comments from Federal Reserve Chairman Jerome Powell, who said at an event in Dallas that the central bank wasn’t “in a hurry” to continue cutting interest rates, despite a recent reduction in borrowing costs. Powell’s remarks followed last week’s Fed decision to ease rates, which had initially sparked optimism on Wall Street.
Stocks surged last week following the election of President-elect Donald Trump, with investors rallying on hopes of pro-business policies. The Dow had closed above 44,000 for the first time in history on Monday, while the S&P 500 and Nasdaq posted significant gains. However, that enthusiasm appears to be waning as traders reassess the sustainability of the market’s rally.
The major indexes are on track to end the week in the red, with the Nasdaq Composite down 0.9%, the S&P 500 off by 0.8%, and the Dow losing 0.5%. These losses are a sharp contrast to the previous week’s surge, and investors are now facing a more cautious outlook.
“Investors are catching their breath and evaluating whether the advance has merit… We really don’t see anything on the horizon right now to upend stocks, but investors are always sort of looking around to see what could cause the trend to end,” said Sam Stovall, chief investment strategist at CFRA Research.
Among individual stocks, Applied Materials, a key supplier of equipment for the semiconductor industry, saw a sharp drop, falling over 8% in early trading after the company issued weak guidance for revenue in the current quarter. On the other hand, Domino’s Pizza saw a more positive reaction, with shares jumping more than 7% after Berkshire Hathaway revealed a new stake in the pizza chain.
Tesla, which had been a major beneficiary of the election rally due to CEO Elon Musk’s strong support for Trump, was down by 3% this week after a stunning 29% surge last week. Investors had hoped that Musk’s backing of the president-elect would continue to propel the stock, but its recent retreat indicates that the rally may be running out of steam.
The stock market’s attention will turn to Friday’s economic data releases, which will include figures on retail sales, import prices, and industrial production. These reports are expected to provide further insight into the health of the US economy and may influence market sentiment heading into the weekend. The week has already been marked by important inflation data, including the release of consumer and producer price indexes, which have been closely watched by investors for signs of rising inflationary pressures.
