Nasdaq, Dow, S&P futures gain to start packed economic, earnings week

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Stock index futures point to a higher open Monday with the Fed headlining a very busy Wall Street week.

Nasdaq 100 futures (NDX:IND) +0.7%, S&P futures (SPX) +0.6% and Dow futures (INDU) +0.5% are higher.

“There have been many eyes on the 4,017 SPX gap, including ours,” BTIG technician Jonathan Krinsky said. “While we would have preferred to see it fully filled, we think we are in the ballpark of where it makes sense to reduce risk.”

The market is still pricing in a near-80% of the FOMC hiking by 75 basis points on Wednesday. Growth worries pulled forward the terminal rate to January from February last week, according to fed funds futures.

“The US certainly saw a rolling over of growth expectations towards the end of last week, where a combination of poor business optimism, increasing jobless claims, and a large services PMI miss … drove yields lower as investors priced in an easier Fed policy path,” Deutsche Bank’s Jim Reid said.

Rates are little changed. The 10-year Treasury yield is up 2 basis points to 2.80% and the 2-year is flat at 2.99%.

“The monthly trend of higher yields in the first half of the month, and lower yields in the second, reflects the current tension between downside growth concerns and upside inflation risks,” Morgan Stanley said.

Along with the Fed the earnings calendar is packed, with 175 S&P companies reporting, including the rest of the megacaps. Despite below-par performance so far, Citi says resilience in the results still supports its thesis for a second-half gain in stocks.

Among active issues, stocks tied to monkeypox are moving after the WHO declared it an emergency.