Stock futures inch higher as the S&P 500 heads for best January since 2019

Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on January 26, 2023 in New York City.

Michael M. Santiago | Getty Images

Stock futures rose slightly in overnight trading as the S&P 500 looks to cap its best January since 201[ads1]9.

Futures tied to the S&P 500 rose 0.26%, while futures tied to the Dow Jones Industrial Average rose 0.15%, or 49 points. Nasdaq 100 futures rose 0.28 percent.

The overnight moves followed a lull in what has been a stellar January for stocks. In regular trading, the Dow fell 260.99 points, or 0.77%, while the S&P and Nasdaq Composite fell 1.30% and 1.96%, respectively.

Stocks have rallied to start the year after a brutal 2022 — and the worst year for stocks since 2008. At Monday’s close, the S&P and Dow are up 4.64% and 1.72%, respectively, in January, heading for their third positive month in four. The Nasdaq Composite is up 8.86% this month, marking its best monthly performance since July.

“The reason I’ve been bullish on stocks to start the year is because revisions are largely behind us, people got too negative …,” Trivariate Research’s Adam Parker told CNBC’s “Closing Bell: Overtime” on Monday. “That’s not the case. We have an eroding and retarding backdrop, not one that tanks.”

A solid January can be a good sign for the market, potentially heralding a continued upswing in the months that follow. Of the five instances in which the S&P gained more than 5% in January after a negative year, the benchmark rose 30% for the year on average, said Ryan Detrick of the Carson Group. in a tweet.

However, a busy week of earnings, with reports from the likes of McDonald’s, Meta Platforms and Amazon, could put this recent rally in jeopardy. Investors are paying close attention to comments about how some of the biggest companies are doing with high inflation and fears of slowing spending.

Attention is also focused on the latest interest rate decision due to the Federal Reserve’s latest policy meeting starting on Tuesday. Traders expect a 25 basis point increase, but will monitor the comments to see how much longer the Fed intends to raise, or when it plans to cut interest rates.

Companies reporting earnings on Tuesday include McDonald’s, Caterpillar, General Motors, Pfizer and Advanced Micro Devices.

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