Traders work at the New York Stock Exchange (NYSE), on September 6, 2022.
Brendan McDermid | Reuters
US stock futures fell on Sunday as investors awaited a week full of midterm congressional elections as well as the latest consumer inflation report.
Dow Jones Industrial Average futures fell 187 points, or 0.6%. S&P 500 and Nasdaq 100 futures fell 0.7% and 0.8%, respectively.
Apple shares may fall after the tech company said iPhone production has been temporarily reduced due to Covid-19 restrictions in China.
Those moves follow Friday’s rally, when the Dow Jones Industrial Average gained nearly 402 points, or 1.3%. The S&P 500 rose 1.36% and the Nasdaq Composite rose 1.28%. Still, the major averages ended the week with losses. The Dow ended a four-week winning streak on fears of a rate hike.
Tuesday’s midterm elections will determine which party controls Congress and affect the direction of future spending. Democrats currently control the House and have a majority in the Senate. A Republican sweep could signal greater support for oil and gas companies.
On the economic front, investors expect Thursday’s CPI report to provide more insight into the Federal Reserve’s efforts to crush inflation. A hot inflation report could signal to investors that a turn to higher interest rates, for longer, could be further away than expected.
“[In] In order for the equity and bond markets to match the post-peak inflation performance shown in the table, inflation must continue to fall, and at a faster rate than we have seen so far. Until the Fed signals that the ‘pivot’ is near, things could remain challenging,” Baird’s Ross Mayfield wrote in a recent note.
Elsewhere, several companies are expected to report on Monday, including Palantir Technologies, Activision Blizzard, Lyft and Take-Two Interactive. Corporate earnings season is winding down with most S&P 500 companies reporting results.