US stock futures remained stable in overnight trading on Monday after the Nasdaq Composite and S&P 500 hit new record highs ahead of the Federal Reserve’s final monetary policy meeting.
Dow futures fell just 12 points. S&P 500 futures were flat and Nasdaq 100 futures were 0.04% lower.
On Monday, the S&P 500 gained 0.2% to close on a new high of 4,255.15. However, the Dow Jones Industrial Average lost 85 points.
The Nasdaq Composite was the relative outperformer, rising 0.8% to close at an all-time high of 14,174.14. As bond yields continue to decline, investors are flocking to growth stocks again. The 10-year government bond rate hit a three-month low last Friday and hovered 1.5% on Monday.
Bitcoin surged to $ 40,000 on Monday after Tesla CEO Elon Musk said Sunday the company will resume Bitcoin transactions once it confirms miners are using reasonable clean energy consumption.
The Federal Reserve’s two-day monetary policy session begins Tuesday and is a focus for markets this week. The central bank is unlikely to take any action. However, comments on interest rates, inflation, and the economy could drive market moves.
Traders will listen carefully to comments on inflation and the Fed’s possible tightening plans.
Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that this Fed meeting could be the most important in Chairman Jerome Powell’s career. Jones also warned that Powell could trigger a big sell-off in risk assets if he doesn’t do a good job of signaling a decline.
Investors will also be on the lookout for yet another inflation meter released on Tuesday. The producer price index – which measures prices paid to producers as opposed to consumer-level prices – is expected to rise 0.5% in May, according to Dow Jones estimates. The core PPI – which excludes volatile items like food, energy, and trade services – is also estimated at a 0.5% increase.
May retail sales data is also scheduled to be released at 8:30 a.m. ET. Economists polled by Dow Jones expect a decline of 0.6% for the past month. Excluding cars, economists expect retail sales to jump 0.5% in May. Retail sales were flat in April as the boost from economic controls wore off.
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