Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023.
Brendan Mcdermid | Reuters
U.S. stock futures opened higher slightly ahead of a big week filled with a Federal Reserve rate decision, jobs report and Apple’s earnings report.
S&P 500 futures added 0.3%, while Nasdaq-100 futures gained 0.4%. Dow Jones Industrial Average futures were up 0.1%.
The S&P 500 fell into correction territory last week, shedding 2.5% for the week to put it down by 10.6% from its 2023 high. The benchmark is off 4% for October, on pace for its third-straight negative month which would be its first such streak since 2020 as the pandemic struck.
The Federal Reserve decision looms on Wednesday, where the central bank is widely expected to hold its benchmark interest rate at the same level. With surging interest rates as the main culprit of this stock market correction, investors will be hoping the Fed signals it could be done raising rates. Traders expect the Fed to be done raising rates at least for 2023.
The 10-year Treasury yield jumped above 5% to start last week, but finished at 4.84%. Friday will bring the October jobs report with investors hoping for some slowing in the labor market that will allow the Fed to feel comfortable with staying on hold the rest of the year.
Apple will report earnings Thursday after the bell. The S&P 500’s largest member is in a correction itself, down 15% from its 52-week high.
The sell-off has been centered around Nasdaq and tech shares, which investors deem would be hurt the most by surging interest rates. The Nasdaq Composite is off more than 12% from its 2023 high, firmly in correction territory. The Nasdaq and Dow, along with the S&P 500, are headed for their third-straight negative month. Disappointing earning recently out of the Big Tech FANG stocks, like Google-parent Alphabet, have added to the sell-off.
Nasdaq Composite, YTD
“FANG didn’t do well this week in earnings and it really sort-of took some of the support out of stocks,” said Tom Lee, Fundstrat Global Advisors co-founder, on CNBC Friday.
“Do I think the FANG thesis is changed or broken? I mean I don’t think so. To me, if someone hasn’t owned FANG all year, this is a chance to get in.”
McDonald’s will get the earnings reports started with its quarterly update before the bell Monday.
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