U.S. stock futures fell on Monday, following a holiday-shortened week that ended with a mixed performance on Thursday. Major benchmark indices were trading lower in the premarket session.
Chinese Ministry of Commerce warned its trading partners of retaliation in case of Beijing’s isolation by the U.S. "It should be pointed out in particular that China firmly opposes any party reaching a deal at the expense of China's interests," said the Ministry spokesperson, according to a translated version of the statement.
If the trading partners try to isolate Beijing, "China will never accept it and will resolutely take countermeasures in a reciprocal manner."
Meanwhile, the 10-year Treasury bond yielded 4.36% while the two-year bond was at 3.75%. The CME Group's FedWatch tool‘s projections show markets pricing an 89% likelihood of the Federal Reserve keeping the current interest rates unchanged in its May meeting.
| Futures | Change (+/-) |
| Dow Jones | -0.91% |
| S&P 500 | -1.06% |
| Nasdaq 100 | -1.18% |
| Russell 2000 | -1.86% |
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Monday. The SPY was down 1.07% to $520.79, while the QQQ declined 1.17% to $438.87, according to Benzinga Pro data.
Cues From Last Session:
While several S&P 500 sectors posted gains on Thursday, led by energy, consumer staples, and real estate, the broader U.S. market mostly closed lower.
The Dow Jones marked its third consecutive day of losses. All major indices finished the shortened week in the red, pressured by steep declines in technology and health care.
The downturn was largely influenced by declines in information technology stocks like Nvidia Corp. NVDA, down around 3%, and health care stocks like UnitedHealth Group Inc. UNH, which plummeted over 22% after disappointing earnings and guidance.
Meanwhile, Eli Lilly And Co. LLY soared over 14% on positive weight-loss drug trial data.
Economic data from Thursday showed a decline in housing starts, a drop in jobless claims, and a sharp contraction in the Philadelphia Fed Manufacturing Index.
By Thursday’s market close, the S&P 500 had fallen 14.1% from its record high of 6,147.43. The Dow Jones was down 13.15% from its 52-week peak, and the Nasdaq 100 had dropped 17.84% from its high.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.13% | 16,286.45 |
| S&P 500 | 0.13% | 5,282.70 |
| Dow Jones | -1.33% | 39,142.23 |
| Russell 2000 | 0.92% | 1,880.62 |
Insights From Analysts:
According to the data shared by Ryan Detrick from Carson Research, “the best and worst days tend to occur near the same time.”
He cautioned the investors with a graph of best and worst days and said, “So once again, if you sell after the worst days, odds are the best days are right around the corner.”
Detrick also highlighted that after recent corrections, the S&P 500’s advance/decline line has held in surprisingly well. He highlighted that the ratio was well above its January lows.
Meanwhile, Katusa Research underscored in an X post that the market is “approaching bubble territory,” as the S&P 500 Shiller CAPE ratio, or the cyclically adjusted price-to-earnings ratio, was nearly twice its historical average of 17.58.
The ‘Dean Of Valuation,’ Aswath Damodaran, also cautioned investors against the simplistic interpretation of "buying the dip" in his latest blog post.
Damodaran warned that “buying the dip” can be like “catching a falling knife,” as an initial decline might precede a much steeper and prolonged sell-off. Instead of a one-size-fits-all approach, Damodaran outlines several distinct paths for contrarian investors:
- The Value Contrarian: This investor seeks out fundamentally undervalued companies that have been unfairly punished by the market. Their focus is on intrinsic value, patiently waiting for the market to recognize the discrepancy between price and worth. Buying the dip for a value contrarian involves identifying fundamentally sound companies whose temporary price decline offers an even more attractive entry point.
- The Sentiment Contrarian: This investor bets against prevailing market sentiment, often buying when fear and pessimism are rampant. They believe that markets tend to overreact, creating opportunities to profit from the eventual correction. For this type, buying the dip is about capitalizing on widespread panic, assuming the underlying fundamentals are not severely compromised.
- The Catalyst-Driven Contrarian: This investor looks for companies facing temporary setbacks or negative news that they believe will eventually be resolved. They buy in anticipation of a specific catalyst that will trigger a positive re-evaluation by the market. Buying the dip here is a calculated bet on a turnaround or the dissipation of current concerns.
See Also: How to Trade Futures
Upcoming Economic Data
Here’s what investors will keep an eye on this week:
- On Monday, March’s data on the U.S. leading economic indicators will be released by 10:00 a.m. ET.
- On Tuesday, Philadelphia Fed President Patrick Harker will speak at 9:30 a.m., Minneapolis Fed President Neel Kashkari will speak at 2:00 p.m., and Richmond Fed President Tom Barkin will speak at 2:30 p.m. ET.
- On Wednesday, Chicago Fed President Austan Goolsbee will speak at 9:00 a.m., whereas St. Louis Fed President Alberton Musalem and Fed Governor Christopher Waller speak after that at 9:30 a.m. ET.
- April’s S&P flash U.S. services and manufacturing PMI will be announced by 9:45 a.m., and new home sales data for March will be out by 10:00 a.m. ET.
- Fed Beige Book will be out by 2:00 p.m., and Cleveland Fed President Beth Hammack will speak at 6:30 p.m. ET.
- Atlanta Fed President Raphael Bostic will speak at 7:40 p.m. ET.
- On Thursday, initial jobless claims for the week ended April 19, along with March’s durable-goods orders data, will be out by 8:30 a.m. ET.
- Existing home sales for March will be released by 10:00 a.m., and Minneapolis Fed President Kashkari will speak again at 5:00 p.m. ET.
- On Friday, April’s final consumer sentiment data will be announced by 10:00 a.m. ET.
Stocks In Focus:
- Comerica Inc. CMA rose 0.19% in premarket on Monday as it is expected to report earnings before the opening bell. Analysts expect a quarterly earnings of $1.13 per share on revenue of $831.34 million.
- AZZ Inc. AZZ declined 2.47% as Wall Street expects it to report earnings of 98 cents per share on revenue of $368.55 billion after the closing bell.
- Netflix Inc. NFLX jumped 2.90% after reporting stronger-than-expected first-quarter financial results after the closing bell on Thursday. The company said it expects second-quarter revenue of $11.04 billion and earnings per share of $6.61.
- Minerals Technologies Inc. MTX dropped 3.28% after issuing preliminary results for the first quarter, expecting revenue of $492 million for the quarter.
- HIVE Digital Technologies Ltd. HIVE advanced 4.03% after announcing the completion of the first 100 MW infrastructure in Paraguay.
- SHF Holdings Inc. SHFS zoomed 71.30% after it partnered with FundCanna to provide compliant banking and accessible credit facilities to cannabis-related businesses nationwide.
- Vincerx Pharma Inc. VINC slumped 47.27% as it announced its intention to delist from Nasdaq and deregister with the SEC after receiving a non-compliance notice from Nasdaq on April 14.
- Thunder Power Holdings Inc. AIEV plunged 26.78% after Western Capital Resources completed its tender offer on April 17, accepting 680,087 shares or 7.7% of the former’s outstanding shares, exceeding its initial target and accommodating all valid tenders.
- Snow Lake Resources Ltd. LITM lost 26.32% as it announced an update on its share repurchase program without disclosing the exact number of shares repurchased, using its corporate funds for buyback.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 2.67% to hover around $62.30 per barrel.
Gold Spot US Dollar advanced 2.007% to hover around $3,394.03 per ounce. Its fresh record high stood at $3,396.57 per ounce. The U.S. Dollar Index spot was lower by 1.30% at the 97.9410 level.
Asian markets advanced on Wednesday, except Japan's Nikkei 225 index. India's S&P BSE Sensex, Hong Kong's Hang Seng, China’s CSI 300, Australia's ASX 200, and South Korea's Kospi index ended higher. European markets were mostly lower in early trade.
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