By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Monday, continuing the previous week’s rout with investors concerned about future growth after the Federal Reserve ramped up its fight against inflation.
At 07:00 ET (11:00 GMT), the Dow Futures contract was down 155 points, or 0.5%, S&P 500 Futures traded 20 points, or 0.6% lower, and Nasdaq 100 Futures dropped 50 points, or 0.4%.
The major equity averages closed with hefty losses last week, their fifth losing week in six. The blue-chip Dow Jones Industrial Average ended almost 500 points, or 1.6% lower on Friday, at its new closing low for 2022. The broad-based S&P 500 fell 1.7%, while the tech-heavy Nasdaq Composite ended down 1.8%.
These losses followed the U.S. central bank hiking interest rates by a hefty 75 basis points for the third consecutive meeting while signaling that the benchmark rate could rise as high as 4.6%, from the current target range of 3%-3.25%, before pulling back.
Atlanta Federal Reserve President Raphael Bostic said on Sunday that the U.S. central bank can tame inflation, slowing economic growth while avoiding “deep, deep pain.”
However, investors appear to be concerned that the Fed’s aggressive interest rate increases will plunge the largest economy in the world into recession.
With this in mind, they will focus on comments from the likes of St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester, Chicago Fed head Charles Evans, and Fed Vice Chair Lael Brainard during the week for clues of whether a fourth straight 75 bps rate hike is on the cards in November.
The economic data slate is largely empty Monday, but the week includes reports on durable goods orders, consumer confidence, new and pending home sales, as well as the August personal consumption expenditures price index, the Fed’s preferred inflation measure.
Also weighing on sentiment is the deteriorating situation in eastern Europe, with Russia mobilizing troops while Moscow-led referendums in the occupied areas of Ukraine get underway.
In Europe, business morale in Germany this month slumped to its lowest level since the early days of the pandemic, as the Ifo Institute's business climate indicator for September slipped to 84.3, the weakest number since May 2020.
In corporate news, Amazon (NASDAQ:AMZN) will be in focus Monday after the online retail giant announced an expected sale for its loyalty-club shoppers, starting on Oct. 11, aiming to boost holiday revenue.
Oil prices weakened Monday, falling to levels not seen since early January, weighed by the surging U.S. dollar and on concerns that slowing global economic activity will dent demand for crude.
The dollar index, which tracks the greenback against a basket of six other currencies, climbed to a fresh 20-year high on Monday, making all commodities, including oil, which are denominated in dollars more expensive for foreign buyers.
By 07:00 ET, U.S. crude futures traded 1.2% lower at $77.81 a barrel, while the Brent contract fell 1.2% to $84.00. Both contracts slumped around 5% on Friday, falling to eight-month lows.
Additionally, gold futures fell 0.5% to $1,647.55/oz, while EUR/USD traded 0.4% lower at 0.9652.