Written by Peter Norse
Investing.com – US stocks are expected to open lower on Monday, as they begin the new week with an air of caution ahead of the much-anticipated Federal Reserve policy meeting, which should see another big hike in interest rates.
At 07:00 ET (11:00 GMT), the contract was down 260 points, or 0.8%, trading 32 points, or 0.8%, and it went down and down 105 points, or 0.9%.
Major stock averages posted their worst week since June last week, weighed down by expectations of another rate hike following a higher-than-expected August for August as well as a dire warning from delivery giant FedEx (NYSE) about a weak global economy. .
This weakness is expected to continue on Monday, as investors prepare for another big rate hike from the end of its meeting on Wednesday.
Markets have priced in a rate hike of 75 basis points, but the potential for a full percentage point hike has risen since the release of the hot inflation figure last week.
Market watchers will be on high alert for how the US central bank views the future pace of monetary tightening, the Fed’s so-called point chart, given how policymakers see the strength of the economy, and how likely it is that inflation will persist.
“We expect the midpoint to show the fund rate at 4%-4.25% at the end of 2022, an additional increase to peak 4.25%-4.5% in 2023, one cut in 2024 and another two in 2025,” Goldman Sachs analysts said. On a note the rate for the longest run is 2.5%.
Aside from the Fed meeting, the slate of economic data is relatively bare this week, with only August on Tuesday and Thursday having any significant significance.
There are also a few quarterly corporate earnings due this week, including Costco (NASDAQ :), Darden Restaurants (NYSE:), general mills (NYSE :), and linar (NYSE:).
Elsewhere, Tesla (NASDAQ 🙂 could be in the spotlight Monday after authorities in Shanghai said the electric car maker had completed a project to expand production capacity at its factory in the Chinese city.
Amazon (NASDAQ:) has suspended construction of new warehouses in Spain until 2024, Spanish newspapers report, as pandemic-driven online shopping has slowed.
Oil prices fell on Monday, reversing earlier gains as fears of a strong monetary tightening, triggering a global recession, raised fears of slowing demand growth.
The market rose earlier on Monday after China began easing restrictions in the southwestern city of Chengdu, home to more than 21 million people and the largest city facing lockdowns after Shanghai earlier this year.
By 07:00 ET, futures were down 2.1% at $83.02 a barrel, while the contract was down 1.8% at $89.69.
In addition, it was down 0.6% to $1,673.20 an ounce, while trading was down 0.4% at 0.9980.