A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, USA, 20 August 2021.
Andrew Kelly | Reuters
U.S. stock futures were lower in early morning trading Monday after the Dow Jones Industrial Average posted losses for three straight weeks for the first time since September 2020.
Futures on the Dow lost 316 points. S&P 500 futures and Nasdaq 100 futures also traded in negative territory.
The downside in futures came as Hong Kong stocks saw a major sell-off during Monday’s Asian trading session. The benchmark Hang Seng index plummeted 4% as fears for competitive developer China Evergrande Group mounted and dragged other property stocks down.
Equities struggled in September, a seasonally weak month for the market.
The Dow closed Friday’s regular session 166.44 points, or 0.5%, lower at 34,584.88. The S&P 500 was down 0.9% to 4,432.99 and the Nasdaq Composite was down 0.9% to close at 15,043.97.
The S&P 500 saw its largest trading volume since July 19 on Friday and more than doubled its 30-day average volume. Friday coincided with the expiration of stock options, index options, stock futures, and index futures – a quarterly event known as “Quadruple Witching”.
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All three major averages are negative for the month but are still less than 3% below their all-time highs.
The highly anticipated September Federal Reserve meeting is due to take place this week. Fed Chairman Jerome Powell will hold a press conference on Wednesday to conclude the two-day session. Investors are waiting for insights into the Fed’s easing of its loose monetary policy.
Powell has said tapering could happen this year, but investors are waiting for more details, especially after the mixed economic data released since Powell’s last comment.
“Factors building a ‘wall of worries’ are there (e.g. China, supply chain problems, Fed policy, debt ceiling, infrastructure / tax law), although the markets are not too disrupted for the time being. Expect normal setbacks and volatility, “and we would use these periods as opportunities,” said Larry Adam, chief investment officer of Raymond James, in a press release.
Investors also expect a number of key quarterly results this week, with Adobe, FedEx, Darden Restaurants, Nike and Costco releasing financial results.