Equity futures are modestly higher after Dow, S&P posted five consecutive days of losses

U.S. stock index futures were modestly higher during overnight trading on Sunday, as the S&P 500 came out of its longest daily loss streak since February. Fears about the slowdown in economic growth and rising inflation have weighed on the market.

Futures contracts linked to the Dow Jones Industrial Average gained 51 points. S&P 500 futures were up 0.18%, while Nasdaq 100 futures were up 0.14%.

The top three averages ended lower on Friday, with Dow and S&P recording a fifth consecutive day of losses, while the Nasdaq Composite recorded its third consecutive negative session.

During the week, Dow and S&P fell 2.15% and 1.69%, respectively, which was the worst weekly performance of each average since June. The Nasdaq, which has been very tech-savvy, posted the worst week since July, with a 1.61% slip.

Data released on Friday showed that producer prices rose 0.7% in August and 8.3% year-on-year, the largest annual increase since records were kept in November 2010.

The closely monitored consumer price index will be released on Tuesday, at which point the street will see what part of the high costs are being passed on to consumers. Economists surveyed by FactSet expect the reading to show that consumer prices rose 5.3% from the annual rate in August. Retail sales data will be released over the weekend.

“Supply bottlenecks, shortage of inventories, higher commodity prices and higher shipping rates have all contributed to rising input costs,” said Charlie Ripley, strategist at Allianz Investment Management senior investments. “[Friday’s] wholesale price data should be open to the Fed, as inflationary pressures do not yet appear to be diminishing and will likely continue to be felt by the consumer in the coming months, ”he added.

Stocks have been under pressure since the August jobs report, released by the Department of Labor on Sept. 3, lost expectations. Market concerns are circulating that the pandemic will continue to hamper economic growth, while hot inflation will push the Federal Reserve to take action.

“The negative impact of the delta variant on cyclical trading is clear,” Jefferies strategists noted. “It is becoming increasingly clear that the impact of the delta has delayed any attempt to reduce the Federal Reserve, in the same way that it has given a new impetus to Big Tech’s actions with growth that has exceeded its value in this quarter “.

The Federal Reserve will begin its two-day political meeting on Sept. 21, where investors will look for clues about the central bank’s bond-buying program.

Despite last week’s losses, major averages are still relatively close to their record levels. the Dow is 2.87% above its all-time high, while the S&P is 1.92% below its high water level. The Nasdaq Composite, meanwhile, has fallen 1.87% from its record.

During the year, all three have recorded double-digit percentage gains, but the continued impact of Covid-19 could slow the pace of recovery.

“The outlook for post-pandemic economic growth has cooled in time for the fall,” Goldman Sachs said Friday in a note to clients. “Within the market, pricing for months has reflected the weakening of the economic environment,” the firm said. Last week, Goldman cut its GDP growth projection for the fourth quarter, citing the impact of the delta variant on consumer spending.