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Stock futures open flat after S&P 500 snaps two-day winning streak

Stock futures open flat after S&P 500 snaps two-day winning streak

23 Jun 2021

Traders on the floor of the New York Stock Exchange.

Source: NYSE

Stock futures opened flat in overnight trading after the market’s comeback rally hit a speedbump on Wednesday.

Futures on the Dow Jones Industrial Average added 29 points, or 0.07%. S&P 500 futures ticked 0.07% higher and Nasdaq 100 futures edged up 0.09%.

The S&P 500 snapped a two-day winning streak Wednesday, closing the regular session 0.1% lower. The Dow also shed 71.34 points, or 0.2%. Meanwhile, the Nasdaq Composite gained 0.1% to squeeze out another record closing high.

Eight out of 11 S&P 500 sectors closed in the red, led by utilities, which dropped 1.1%. However, energy names like Exxon Mobil, Occidental Petroleum and Devon Energy rose as oil prices continued to climb. Technology names like Tesla and Netflix also closed higher.

Despite Wednesday’s hiccup, the three major indexes are up more than 1% this week, rallying from a sell-off last week after the Federal Reserve heightened inflation expectations and forecast rate hikes as soon as 2023.

Comments from Fed Chair Jerome Powell during a Congressional testimony Tuesday reiterated that inflation pressures should be temporary, which seemed to soothe market sentiment.

“Beneath the optimism, markets are at risk of becoming complacent – and vulnerable to shocks. Any signal that interest rates and bond yields could rise, even in the absence of pronounced inflationary pressure, could shatter market exuberance,” Gaurav Mallik, chief portfolio strategist at State Street Global Advisors, said.

“Central banks will walk a tightrope between allowing the economy to run hot – which history has shown to be a bad idea – and managing inflation risk,” he added.

Investors await new jobless claims data set to be released Thursday for the latest outlook on unemployment.

The Fed’s annual bank stress test results are scheduled for release after the bell on Thursday. The test examines how banks fare during various hypothetical economic downturns. After the Fed’s results, banks typically announce how much capital they can release in the form of dividends and buybacks.

Darden Restaurants, Nike and FedEx are set to report quarterly earnings on Thursday.

— CNBC’s Hugh Son contributed reporting.