By Peter Nurse
Investing.com — U.S. stocks are seen opening lower Monday, starting the new week on a negative note as investors awaited the release of more corporate earnings and an eagerly awaited speech from Federal Reserve Chair Jerome Powell.
At 07:00 ET (12:00 GMT), the Dow futures contract was down 200 points, or 0.6%, S&P 500 futures traded 32 points, or 0.8% lower, and Nasdaq 100 futures dropped 125 points, or 1%.
The main U.S. averages have had a hot start to the year, but closed lower on Friday after the robust U.S. jobs report prompted investors to reconsider how hawkish the Fed may need to be in its efforts to rein in inflation.
The blue-chip Dow Jones Industrial Average closed almost 130 points, or 0.4% lower Friday, while the broad-based S&P 500 fell 1%, and the tech-heavy Nasdaq Composite ended 1.6% lower.
There are a number of Fed policymakers due to speak this week, including New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Atlanta Fed President Raphael Bostic, but the main focus will be on Powell on Tuesday.
The strong payrolls release exacerbated worries that the Fed will continue with its aggressive rate hikes for longer than previously expected, potentially plunging the economy into a recession.
The quarterly earnings season has now reached its halfway point, with 69.6% of the companies having reported results above expectations, according to Refinitiv. Overall, analysts still expect quarterly earnings of the S&P 500 firms to decline 2.7%.
Another 89 companies in the S&P 500 are set to report this week. The highlight will be Dow component Walt Disney (NYSE:DIS) on Wednesday, which faces a proxy battle over board representation.
There will also be results from the likes of News Corp (NASDAQ:NWSA), PepsiCo (NASDAQ:PEP), Under Armour Inc A (NYSE:UAA), Chipotle (NYSE:CMG), Expedia (NASDAQ:EXPE), Royal Caribbean (NYSE:RCL), Uber (NYSE:UBER), and Kellogg (NYSE:K).
Dell (NYSE:DELL) will be in the spotlight Monday after Bloomberg reported that the tech company will slash around 6,650 jobs, or about 5% of its global workforce, hurt by falling demand for its personal computers.
Oil prices edged higher Monday, rebounding after last week’s hefty losses, helped by positive comments on the potential recovery in Chinese demand this year from the International Energy Agency.
IEA head Fatih Birol indicated over the weekend that early signs pointed to a stronger-than-anticipated rebound in China’s economy, likely resulting in a healthy boost to crude demand from the world’s largest importer.
Oil prices slumped last week to more than three-week lows on fears slower growth in major economies like the U.S. and Europe may limit fuel consumption in 2023.
By 07:00 ET, U.S. crude futures traded 0.3% higher at $73.59 a barrel, while the Brent contract rose 0.5% to $80.32. Both contracts dropped 3% on Friday after strong U.S. jobs data, resulting in losses of around 8% over the course of the week.
Additionally, gold futures rose 0.4% to $1,884.95/oz, while EUR/USD traded 0.2% lower at 1.0769.