S&P 500 futures slip after index reached seventh record close of the year

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U.S. stock futures slipped Monday, edging backwards after megacap corporate earnings led to a fresh record high.

What’s happening

  • Dow Jones Industrial Average futures
    fell 124 points, or 0.3%, to 38641.

  • S&P 500 futures
    dropped 13 points, or 0.3%, to 4968.

  • Nasdaq-100 futures
    decreased 38 points, or 0.2%, to 17695.

On Friday, the Dow Jones Industrial Average
rose 135 points, or 0.35%, to 38654, the S&P 500
increased 52 points, or 1.07%, to 4959, and the Nasdaq Composite
gained 267 points, or 1.74%, to 15629. Results from Meta Platforms
and Amazon.com
helped lift the S&P 500 to its 7th record close of the year.

What’s driving markets

Friday also saw the release of payrolls data, which saw a surprisingly strong 353,000 jobs created in January. That U.S. stocks finished higher anyway, despite the bond-market weakness the jobs report triggered, shows the emphasis that the market has been putting on earnings, according to Mike Wilson, Morgan Stanley’s chief U.S. equity strategist.

“We see quality growth continuing to outperform amid strong earnings revisions, particularly relative to lower quality cyclicals and small caps. For now, the internals of the stock market are suggestive of the idea that a stickier rate backdrop is a disproportionate headwind for stocks with poor balance sheets and a lack of pricing power—i.e., lower quality cyclicals and many areas of small caps,” he said.

Federal Reserve Chair Jerome Powell used an appearance on the 60 Minutes program to again push back on the idea the central bank would cut rates in March.

There’s more economic data in store, coming from the ISM services report. That report last month triggered worries about the economy after an unusually low reading for the employment component.

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