Stock futures drop slightly in overnight trading ahead of the shortened holiday week

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Traders work on the floor of the New York Stock Exchange (NYSE) on December 08, 2021 in New York City.

Spencer Platt | Getty Images

Stock futures fluctuated in trading overnight on Sunday after a losing week as investors continued to grapple with the resurgence of Covid cases and an upcoming change in the Federal Reserve’s accommodative monetary policy.

Futures contracts on the Dow Jones Industrial Average lost 130 points. S&P 500 futures fell 0.3% and Nasdaq 100 futures were flat.

Major averages come out of a negative week, with the S&P 500 falling 1.9%. The tech-rich Nasdaq Composite fell nearly 3% last week as investors ditched high-end growth stocks in anticipation of an interest rate hike, while the Dow fell 1.7%.

Some investors are hoping for a Santa Claus rally by the end of the year, which assumes a positive market performance in the last five trading days of the year and the first two trading days of January, according to Almanac of the stock market operator.

“On the one hand, parts of the market are oversold,” Adma Crisafulli, founder of Vital Knowledge, said in a note. However, the “aggressive buy-down” mentality, which has proven so profitable over the past 1.5+ years, particularly in the multiple and high corners of the market, has been supported by a tidal wave. stimulus which is now retreating. “

Last week, the Fed announced a more aggressive plan to cut back on asset purchases and said it would potentially raise interest rates three times next year.

Despite losses last week, the S&P 500 is still up 1.2% this month, taking its gains from 2021 to 23%. The tech-heavy Nasdaq is down 2.4% in December so far as the tech names have been sold. The Dow blue chips gained 2.6% this month.

The omicron virus is raging around the world as the winter holidays approach. The strain was found by testing in 43 of the 50 US states and around 90 countries, and the number of cases doubles in 1.5 to 3 days in areas of community transmission, the World Health Organization (WHO) said on Saturday.

Politically, Senator Joe Manchin, a conservative Democrat from West Virginia, said on Sunday that he would not support the Biden administration’s “Build Back Better” plan. Manchin’s decision will likely kill the $ 1.75 trillion social spending and climate policy bill in its current form.


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