A trader works on the trading floor of the New York Stock Exchange (NYSE) on January 5, 2023.
Andrew Kelly | Reuters
Stock futures rose after Monday The major averages saw their first major rally of the new trading year.
Futures linked to the Dow Jones industrial average rose 85 points, or 0.3%, while S&P 500 and Nasdaq 100 futures added 0.3% and 0.4%, respectively.
All major averages improved last week, with the Dow and S&P posting their best week since November. The Dow rose 700 points, or 2.13%, on Friday, while the S&P 500 and Nasdaq Composite added 2.28% and 2.56%, respectively, after the December jobs report signaled that inflation may ease.
Nonfarm payrolls came in slightly higher than expected, but wages rose at a slower pace than expected. That, along with data showing a contraction in the services sector, boosted confidence that the central bank’s interest rate hikes are meeting their target.
The S&P 500’s performance on Friday “confirmed what we expected entering 2023: The monthly jobs report will be the ‘new CPI,'” said Wells Fargo analyst Christopher Harvey, using the Consumer Price Index summary. This year, labor data “sets the tone for marginal swings in Fed sentiment (hawkish or bullish).
Harvey said the data helped dispel pessimism among investors earlier in the week after the minutes of the December Fed meeting were released, in which officials said interest rates should be raised. “Just a little while.”
The New York Fed survey of consumer expectations and consumer credit data will be released on Monday. Later in the week, investors will look to December’s consumer price index report on Thursday and big bank earnings on Friday.
