Futures on the Dow Are Falling as Investors Await the Midterm Elections and Inflation Report

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Last Updated on November 7, 2022 by Bitfinsider

Futures on U.S. equities sank slightly on Sunday as investors anticipated a week crammed with midterm elections and the latest consumer inflation figures.

Futures on the Dow Jones Industrial Average decreased by 31 points, or 0.1%. Futures for the S&P 500 and Nasdaq 100 fell 0.15 percent and 0.25 percent, respectively.

Apple stock may decline on the announcement that iPhone production has been temporarily slowed due to China’s Covid-19 restrictions.

These actions follow the Dow Jones Industrial Average’s approximately 402-point, or 1.3%, increase on Friday. The S&P 500 jumped 1.36 percent, while the Nasdaq Composite rose 1.28 percent. Nevertheless, the main averages ended the week in the red. Fears of a rate hike stopped the Dow’s four-week success streak.

The outcome of Tuesday’s midterm elections will determine which party controls Congress and likely have an impact on future expenditures. Currently, Democrats dominate the House and hold a majority in the Senate. A Republican victory might mean increased backing for oil and gas firms.

On the economic front, investors expect Thursday’s CPI report to provide additional insight into the Federal Reserve’s attempts to combat inflation. A strong inflation report could indicate to investors that a shift away from higher interest rates for an extended period of time may be further away than anticipated.

In order for equity and bond markets to replicate the post-peak inflation performance shown in the table, inflation must continue to decline at a quicker rate than we have seen thus far. In a recent report, Baird’s Ross Mayfield stated, “Until the Fed indicates the ‘turn’ is near, things could remain difficult.”

Other companies, including Palantir Technologies, Activision Blizzard, Lyft, and Take-Two Interactive, are slated to report on Monday. The majority of S&P 500 businesses have reported profits, bringing to a close the corporate earnings season.

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