U.S. stock futures signaled a softer start on Monday, suggesting equities may retrace some of last week’s strong advance.
After a brisk rebound that reversed much of the early-November slump, some investors appear ready to take profits, especially with the major indexes having logged five straight days of gains and inching back toward record territory.
Recent enthusiasm has been fueled largely by growing confidence that the Federal Reserve is preparing to lower interest rates. Dovish remarks from senior Fed officials boosted expectations for another quarter-point cut at next week’s policy meeting, with CME Group’s FedWatch Tool now showing odds of 87.4%.
Still, a wave of key U.S. economic reports due out this week could influence policymakers’ thinking — and keep markets cautious as data rolls in.
Recap of Friday’s session
Following the Thanksgiving break, traders returned to a half-day Friday session and extended the market’s pre-holiday rally. All three major benchmarks finished higher for a fifth consecutive session, ending just shy of their intraday peaks.
- Dow Jones Industrial Average: +289.30 points (+0.6%) to 47,716.42
- Nasdaq Composite: +151.00 points (+0.7%) to 23,365.69
- S&P 500: +36.48 points (+0.5%) to 6,849.09
For the holiday-shortened week:
- Nasdaq jumped 4.9%
- S&P 500 climbed 3.7%
- Dow gained 3.2%
Despite the strong finish, the Nasdaq still ended November down 1.5%, though that was a sharp recovery from its worst levels earlier in the month, when it was down as much as 7.7%. The Dow and S&P 500 managed modest monthly gains of 0.3% and 0.1%, respectively.
The recent push upward has pulled the indices well off their lows, as traders largely brushed aside earlier worries about stretched valuations. Expectations of easier monetary policy have played a major role in that rebound after Fed officials’ dovish tone contrasted with fears earlier in November that rates might be left unchanged in December.
Friday’s trading volume was relatively light, partly due to the holiday weekend. An early market close and a temporary disruption at the Chicago Mercantile Exchange also kept some investors sidelined, alongside a lack of major U.S. economic releases.
Sector moves
Computer hardware stocks were among the strongest performers, with the NYSE Arca Computer Hardware Index rising 2.5%. SanDisk (NASDAQ:SNDK) jumped 3.8% as the company was added to the S&P 500 before the market opened.
Gold miners also advanced, supported by a sharp rise in the price of gold, pushing the NYSE Arca Gold Bugs Index up 2.1%.
Semiconductor, energy, and software shares enjoyed solid gains, while pharmaceutical stocks lagged.