US futures fall as Powell abandons hopes for a rate cut

U.S. stock futures fell on Monday after Federal Reserve Chairman Jerome Powell cooled prospects for an early rate cut, raising bets on a full week of corporate earnings to keep the recent rally alive.

S&P 500 (^GSPC) futures fell 0.2%, signaling a pullback from the benchmark’s record run. Dow Jones Industrial Average (^DJI) futures fell roughly 0.2%, while those on the tech-heavy Nasdaq 100 (^NDX) fell 0.1%.

Stocks are slumping after a rollercoaster week that ended in weekly gains thanks to a stellar January jobs report and strong, high-profile earnings updates. This upbeat mood took a hit after Powell on Sunday doubled down on his midweek message that the central bank will be cautious in deciding when to cut rates, saying the “danger of moving too quickly is that the work is not quite done yet.” in suppressing inflation.

That prompted investors to scale back their bets on interest rate cuts – not just for March, but also for May. according to the CME FedWatch Tool. US bonds fell, while 10-year Treasury yields (^TNX) rose about six basis points to 4.08%.

Investors are now looking to this week’s quarterly results for inspiration, after triumphant reports from Meta (META) and Amazon (AMZN) last week sent stocks into rally mode with little on the economic agenda. Highlight McDonald’s (MCD) is set to ride the wave of quarterly earnings on Monday, with its release expected before the bell.

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