Equity futures opened slightly higher on Monday night after a mixed session, as investors reflected more on the market implications of Federal Reserve re-appointment as central bank head Jerome Powell.
S&P 500 contracts rose. Previously, the blue chip index hit an all-time intraday high before retreating and ending up in the red, with a drop in tech stocks lagging behind the index. The Nasdaq underperformed with a decline of more than 1%, while the Dow narrowly finished in the green. Zoom Video Communication (ZM) shares fell late in the day even after the company posted better-than-expected quarterly revenue growth and year-on-year guidance, suggesting that usage of the video conferencing company’s software was holding up higher. strongly than expected when reopening. Companies such as Best Buy (BBY), Dick’s Sporting Goods (DKS) and Nordstrom (JWN) are expected to release their quarterly results on Tuesday.
The appointment of Federal Reserve Chairman Jerome Powell as central bank leader caught market attention this week, with many investors reacting favorably to the likelihood that the Fed’s previously wired monetary policy framework will remain. in place with Powell’s reappointment. This includes expectations of a decrease in ongoing asset purchases until the middle of next year and at least one interest rate hike before the end of 2022.
“Continuity in a time of such extraordinary uncertainty is certainly good news. We have extraordinary uncertainty because we are pivoting from the phase of the cycle where the Fed supported the recovery from the pandemic-induced recession, and… it has avoided a collapse of the financial markets ”, Diane Swonk, chief economist of Grant Thornton, Yahoo Finance Live said. “But now we have very easy financial market conditions and we have to deal with inflation. And having to deal with inflation and put it down without derailing the recovery – that’s a very difficult thing to do. We haven’t seen the Fed keep inflation down since the early 1980s. ”
President Joe Biden also appointed Fed Governor Lael Brainard – previously seen as a potential candidate for Fed chairman to replace Powell – as vice chairman of the Fed’s board of governors. With those two appointments in place, market players have turned their attention to who might fill the three vacant and soon to be vacant seats on the Fed’s board of directors, which includes the key vice president for the oversight role. Biden said in a press release Monday morning that he planned to announce the appointments “from early December.”
“Political decisions like this are competitions between affinity – you like someone in your own party – and convenience – what can you get the Senate to do for you, and will the markets take it right?” ? You must consider the choices of Powell-Brainard as part … of a larger whole ”, Vincent Reinhart, chief economist and macro-strategist of Dreyfus-Mellon, Yahoo Finance Live said. “The White House is going to have three new governors to appoint, and this is likely to become more gradual. So at the end of the day, six months from now, the group of people President Powell has to fight over to make decisions will be more accommodating than they are today.
6:06 p.m. ET Monday: Stock futures open slightly higher
Here’s where the markets were trading on Monday night:
S&P 500 Futures Contracts (ES = F): +7.5 points (+ 0.16%), at 4,687.25
Dow Futures (YM = F): +49 points (+ 0.14%), at 35,620.00
Nasdaq Futures (NQ = F): +28.5 points (+ 0.17%) to 16,410.50
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter