Traders on the floor of the NYSE, August 4, 2022.
Stock futures traded lower early Monday morning after the S&P 500 posted its biggest weekly gain in nearly five months on the back of light inflation data.
Dow Jones Industrial Average futures fell 84 points, or 0.25%. S&P 500 futures fell 0.32% and Nasdaq 1[ads1]00 futures traded 0.55% lower.
The S&P 500 rose 5.9% last week for its best week since June. Investors cheered a lighter-than-expected inflation reading, betting the Federal Reserve would soon slow its aggressive tightening campaign.
“A remarkable shift has occurred in the market, with investors increasingly taking risk across asset classes,” said Mark Hackett, Nationwide’s head of investment research. “Technical indicators have improved dramatically, with investor sentiment, momentum, breadth and risk factors all showing noticeable improvement.”
The tech-heavy Nasdaq Composite rose 8.1% last week for its best week since March, while the blue-chip Dow rose 4.2%.
The Cboe Volatility Index, known as Wall Street’s fear gauge or VIX, fell 1 point to 22.5, hitting its lowest level since August. The VIX, which tracks the 30-day implied volatility of the S&P 500, had traded above the 30-point threshold for most of October.
Investors digested news on the policy front over the weekend. Democrats will retain control of the Senate in the 2022 midterm elections, NBC News estimates. The party will have at least 50 seats after Sens. Mark Kelly of Arizona and Catherine Cortez Masto of Nevada held off the challenges.
Meanwhile, the third quarter earnings season is set to continue, with a heavy focus on retail. Tyson Foods will report results Monday before the bell. Major retailers Walmart, Home Depot, Target, Lowe’s, Macy’s and Kohl’s are all due to release numbers this week.