Contracts on Wall Street’s major indexes fell on Monday evening after an earlier volatile session that saw shares rise from record lows during the day. The Nasdaq made an afternoon rally to close in the green, while the S&P 500 and Dow extended their losing streak – even after a modest comeback.
Concerns about a sooner-than-expected rate hike dampened investor optimism as the New Year approaches, putting stock markets in a risk-isolated state so far in 2022. Meanwhile, Treasury yields have soared, with 10-year yields soaring. standard. 1.8% to reach its highest level since January 2020.
“We are seeing a reassessment of what the Fed is going to do,” Stephen Whiting, chief global investment analyst at Citi Private Bank, told Yahoo Finance Live.
“The possibility is very clear that the Fed will succeed in bringing down inflation,” Whiting said. “It was going to happen one way or another and we’re just trying to collect how active the Fed is doing that.”
Goldman Sachs, Evercore ISI and Deutsche Bank are among the Fed’s watchers re-pricing the Fed’s pace of rate hikes. Companies recently projected that short-term interest rates would be 100 basis points higher by the end of 2022 than they are now.
“We are revising our forecasts for the Federal Reserve once again given low unemployment, strong wages, and an anticipation of higher inflation again,” Evercore ISI’s Krishna Guha said in a note.
In an interview with CNBC on Monday, JPMorgan CEO Jamie Dimon said he hopes for a “soft landing” by the central bank as it prepares to start raising the federal funds rate in March.
“It’s going to be like a thread of a needle,” Dimon said, though he added that potential inflation is worse than the Fed thinks and interest rates could be raised more than currently expected.
“I would personally be surprised if it was only four increases,” Damon said. “Four increases of 25 basis points is a very small amount, and it is very easy for the economy to absorb.”
Central bank monetary policy will remain in focus this week, highlighting the latest Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS) as investors continue to gauge inflationary pressures and the Fed’s potential response.
Another interesting reading on the latest number is expected, with economists expecting a 7.1% reading in December based on Bloomberg Consensus data, up more than November’s 6.8% year-over-year segment.
Bank earnings are also underway, with BlackRock (BLK), Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) due to report fourth-quarter results before the market opens on Friday.
6:02pm ET Monday: Stock futures remain unchanged after a choppy session
Here is where the markets were trading before the evening session on Monday:
S&P 500 futures contractsES = F.): +1.50 points (+0.03%) to 4,663.75 points
Dow futures contractsYM = F.): -6.00 points (-0.02%), to 35,946.00
Nasdaq futures contractsNQ = F.): +6.25 points (+0.04%) to 15,614.25
raw (CL = F.): +0.25 dollars (+0.32%) to 78.48 dollars per barrel
gold (GC = F.): + $1.20 (+0.07%) to $1,800.00 per ounce
Treasury for 10 years (^ degeneration): unchanged to give 1.78%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed
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