Stock Market Today: Stocks steady ahead of massive week on Wall Street

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U.S. equity futures were mixed in early Monday trading while oil prices extended gains, as investors braced for a massive week on Wall Street while eyeing developments that suggest the Middle East conflict could spiral into a wider regional war.

Stocks snapped a run of five consecutive record closes on Friday, with the S&P 500 slipping modestly into the finish, despite a week of solid economic data and further evidence that inflation pressures are easing toward the Federal Reserve’s 2% target. 

This week’s focus, however, is expected to be much more comprehensive, with more than 80 S&P 500 companies reporting December-quarter earnings. These include five of the so-called Magnificent 7 tech giants in the form of Microsoft, Google, Apple, Amazon and Meta Platforms. 

Analysts estimate collective S&P 500 fourth-quarter earnings rose 4.9% from fourth-quarter 2022 to a share-weighted $456 billion. First-quarter earnings are forecast to improve by around 5.9% to $464.8 billion.

BRYAN R. SMITH/AFP via Getty

The Federal Reserve will also kick off its two-day policy meeting tomorrow, with its January interest-rate announcement set for Wednesday at 2:00 p.m. U.S. Eastern, followed 30 minutes later by a news conference with Chairman Jerome Powell.

Traders are not pricing in any chance of a change in the Fed’s benchmark lending rate, currently pegged at between 5.25% and 5.5%. But they see a 50% chance that the central bank will begin cutting rates in March, with reductions following in May and June, according to CME Group’s FedWatch.

Investors will also digest a host of labor-market data this week, including the December Jolts report on job openings Tuesday; payroll-processing group ADP’s national employment report on Wednesday; weekly jobless-claims data on Thursday and the Labor Department’s official nonfarm payroll report on Friday.

Traders will also be watching both the oil market and developments in the Mideast, where three U.S. servicemen were killed and 34 others injured in a drone attack led by Iran-backed rebels on aa U.S. base in northern Jordan, known as Tower 22.

Related: Huge earnings week on tap, led by tech titans Apple and Microsoft

The attacks, which followed a series of incidents involving cargo and oil-carrying vessels in the Red Sea, were condemned by President Joe Biden, who vowed the U.S. would retaliate “at a time and in a manner of our choosing.”

Brent crude futures, which rose more than 6% last week to mark their strongest five-day run since Hamas launched its attacks on Israel in early October, were marked 13 cents higher at $83.68 per barrel in early Monday trading.

WTI futures for March delivery, which are tightly linked to U.S. gasoline prices, were up 20 cents at a near three-month high of $78.21 per barrel.

On Wall Street, stocks look set for a muted open ahead of this week’s heavy headline calendar, with futures contracts tied to the S&P 500 suggesting a 2-point opening-bell bump.

Dow futures suggest a 17-point opening bell decline while those linked to the Nasdaq are indicating a 32-point advance.

In overseas markets, Europe’s Stoxx 600 was marked 0.09% higher in early Frankfurt dealing. The index was trading near the highest levels in two years ahead of a slew of big-bank earnings later in the week. Britain’s commodity-heavy FTSE 100, meanwhile, was marked 0.22% higher in London.

Overnight in Asia, markets shrugged off the liquidation of China Evergrande, the indebted property developer, and focused on efforts from Beijing to stoke growth in the world’s second-largest economy. 

The regionwide MSCI ex-Japan benchmark rose 0.78% into the close of trading, while the Nikkei 225 added 0.77% in Tokyo.

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