Traders on the floor of the New York Stock Exchange, Aug. 4, 2022.
Source: NYSE
Stock futures were lower after the S&P 500 closed at a new 2023 high following a five-week win streak.
Futures on the Dow Jones Industrial Average shed 0.2%. S&P 500 futures were down 0.3%. Nasdaq 100 futures inched 0.37% lower.
The large-cap equity index posted its highest close since March 2022 on Friday, bringing its year-to-date gains to almost 20%. The blue-chip Dow has also advanced for five weeks straight and is up 9.4% for the year. The tech-heavy Nasdaq Composite has popped 37% in 2023.
The rebound in stocks since October came as investors increasingly bet that the Federal Reserve will start cutting interest rates next year. Investors maintained this belief last week even as Fed Chairman Jerome Powell’s tried to tamp down rate-cut expectations, saying it’s “premature” to anticipate easing in policy.
Some investors see the rally as unsustainable.
“At present things are very overdone,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “The conversation on inflation, growth, the Fed, and earnings are all too binary, reductive, and facile.”
November was the best month for the 30-stock Dow since October 2022. The S&P 500 and Nasdaq Composite both enjoyed their biggest monthly gains since July 2022.Â
Investors are awaiting the November jobs report, scheduled for release on Friday, for confirmation the Fed is done hiking rates. Economists polled by Dow Jones expect the economy to have added 190,000 payrolls.
Shares of Alaska Airlines declined more than 9% in premarket trading after news that it agreed to acquire rival Hawaiian Airlines in a $1.9 billion deal. The move marks an effort for both carriers to expand along the West Coast.
