Investing.com– U.S. stock index futures steadied on Sunday evening after Wall Street tumbled on hotter-than-expected payrolls data, with focus turning to several major bank earnings, and key inflation data due this week.
Investors were now looking to the fourth-quarter earnings season, which is set to begin in earnest this week with prints from several major Wall Street banks. Closely-watched consumer price index inflation data is also on tap this week, and is likely to factor into the outlook for interest rates.
S&P 500 Futures were flat at 5,8.50 points, while Nasdaq 100 Futures steadied at 21,023.50 points by 18:35 ET (23:35 GMT). Dow Jones Futures rose 0.2% to 42,227.0 points.
Bank earnings awaited this week
A string of major banks are set to report fourth-quarter earnings this week, with prints from JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Goldman Sachs Group Inc (NYSE:GS), Citigroup Inc (NYSE:C), and Bank of New York Mellon (NYSE:BK) due on Wednesday.
Bank of America Corp (NYSE:BAC) and Morgan Stanley (NYSE:MS) will report on Thursday, as will major insurer Unitedhealth Group (NYSE:UNH).
Focus will be squarely on whether strength in the U.S. economy translated into robust corporate earnings through the last quarter of 2024, even as inflation remained sticky and interest rates were relatively high.
This week’s earnings are also set to define the next leg of movement for Wall Street, as a mix of rate jitters and profit-taking at lofty valuations also battered U.S. stocks over the past month.
Wall Street battered by rate jitters; inflation awaited
Wall Street indexes were nursing steep losses from Friday, as hotter than expected nonfarm payrolls spurred increased conviction that rates will fall slowly this year.
While the Fed did slash rates by a total of 100 basis points in 2024, the central bank signaled a much slower round of rate cuts this year, citing concerns over sticky inflation and a strong labor market.
Focus this week is on key consumer price index inflation data for December, which is due on Wednesday. Any signs of sticky inflation are expected to further the Fed’s outlook of slower rate cuts.
The central bank was also recently seen expressing some concerns over expansionary and protectionist policies under incoming President Donald Trump, which could underpin inflation and interest rates in the long term.
Trump is set to take office next week.
The S&P 500 slid 1.5% to 5,827.0 points on Friday, while the NASDAQ Composite tumbled 1.6% to 19,161.63 points. The Dow Jones Industrial Average fell 1.6% to 41,938.45 points.