Traders work on the floor of the New York Stock Exchange.
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Stock futures traded lower on Tuesday morning as investors tried to continue to build on the momentum in early 2023 and looked forward to more corporate earnings.
Futures related to the Dow Jones Industrial Average lost 54 points, or 0.16%. S&P 500 futures fell 0.32%, while Nasdaq 100 futures fell 0.51%.
All three major indices come out of the first two weeks of trading in the new year. The Nasdaq Composite is leading the way higher, up 5.9%, as investors bought into surging technology stocks amid rising hopes of an improving stock growth landscape. The S&P 500 and Dow have advanced 4.2% and 3.5%, respectively, since the start of the year.
The gains were made on the back of the first set of inflation-related data that investors saw as pointing to a contraction in the economy, with hopes that it would give the Federal Reserve an excuse to slow rate hikes again. Last week, the Consumer Price Index for December showed that prices had eased by 0.1% from the previous month, but prices were still 6.5% higher than the same month a year ago.
Investors’ focus now turns to corporate financials as earnings season begins. Banks took center stage Friday as investors digested comments about the possibility of a recession. Goldman Sachs and Morgan Stanley are due to report before the bell Tuesday, followed by United Airlines after the market closes.
“The economic data has been bland, to say the least, which is not something we’ve had for the vast majority of this past year,” said Craig Erlam, senior market analyst at OANDA. “The question now is whether earnings season will foster this new sense of hope or spoil the party before it really gets started.”
Investors will also be closely watching the news from the World Economic Forum meeting in Davos which will be held this week.