A trader works on the trading floor at the New York Stock Exchange (NYSE), January 5, 2023.
Andrew Kelly | Reuters
Stock futures rose Monday after the major averages notched their first big rally of the new trading year.
Futures tied to the Dow Jones Industrial Average ticked up 140 points, or 0.4%, while S&P 500 and Nasdaq 100 futures added 0.6% and 0.7%, respectively.
All the major averages advanced last week, with the Dow and S&P 500 posting their best week since November. The Dow on Friday surged 700 points, or 2.13%, while the S&P 500 and Nasdaq Composite added 2.28% and 2.56%, respectively, after the December jobs report signaled that inflation may be easing.
Nonfarm payrolls came in slightly higher than expectations, but wages increased at a slower pace than expected. That, and data showing a contraction in the services sector, heightened hopes that the central bank’s rate hikes are accomplishing their goal.
Friday’s S&P 500 performance “confirmed what we anticipated entering 2023: The monthly jobs report will be the ‘new CPI,'” said Wells Fargo analyst Christopher Harvey, using an acronym for the consumer price index. This year, labor data is “setting the tone for marginal swings (either hawkish or dovish) in Fed perceptions.”
Harvey said that data helped investors shake off pessimism earlier in the week following the release of the December Fed meeting minutes, in which officials said interest rates would need to be elevated for “sometime.”
The New York Fed Survey of Consumer Expectations and consumer credit data are due out Monday. Later in the week, investors will look for December’s consumer price index report Thursday and big bank earnings Friday.