U.S. equity futures edged lower in early Monday trading, while global oil prices jumped to a two-week high and Treasury yields steadied, as investors looked to crucial five-day stretch on Wall Street highlight by a Federal Reserve rate decision later in the week.
Stocks ended sharply higher on Friday as investors snapped-up beaten-down stocks following the S&P 500’s slump into correction territory the previous day amid a slump that has wiped more than $4 trillion in equity market value in less than a month.
The bargain-hunting rally failed to prevent the fourth consecutive weekly decline for the S&P 500, however, a investors remain concerned that the tariff and budget-cutting policies of President Donald Trump will trigger a near-term recession in the world’s biggest economy.
Treasury Secretary Scott Bessent, speaking to NBC’s ‘Meet The Press’ on Sunday, said he couldn’t “guarantee” that there wouldn’t be a recession, but dismissed the idea that the recent stock market slide was a precursor to one.
“Corrections are healthy, they are normal,” Bessent said. “I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great.”
Treasury Secretary Scott Bessent said stock market corrections are “normal and healthy”.
A more detail assessment of the impact of the administration’s policies will be published later this week by the Federal Reserve, which will conclude its two-day policy meeting Wednesday in Washington with fresh growth and inflation forecasts.
Analysts expect the central bank to make no changes to its benchmark lending rate, which currently sits at 4.375%, but see the Fed lowering its 2025 growth estimate while nudging it inflation forecast modestly higher.
The Fed meeting will fall in the middle of an active week for central bank activity, with officials from no fewer than five set to unveil policy decisions over the coming days, including the Bank of England and the Bank of Japan.
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The U.S. dollar index was holding stead at 103.601 heading into the start of the week, while benchmark 10-year Treasury note yields were little-changed from Friday levels at 4.287%.
On Wall Street, futures contracts tied to the S&P 500, which is down 5.3% for the month, suggest an opening bell decline for the benchmark of around 15 points, while the Dow Jones Industrial Average is called 140 points lower.
The tech-focused Nasdaq, which has slumped 5.8% so far this month, is priced for a 51 point decline.
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Away from equities, global oil prices were modestly higher following a series of U.S. attacks on Houthi rebels in Yemen who the administration says have been targeting oil tankers and other cargo vessels in the Red Sea.
Brent crude futures for May delivery, the global pricing benchmark, were last seen 62 cents higher at $71.22 per barrel while WTI contracts for April rose 63 cents to $67.31 per barrel.
In overseas markets, Europe’s Stoxx 600 was marked 0.29% higher in mid-day Frankfurt trading, while Britain’s FTSE 100 gained 0.21% in London.
Overnight in Asia, the regional MSCI ex-Japan benchmark rose 0.91% into the close of trading while the Nikkei 225 rose 0.93% in Tokyo after hitting a five-month low late last week.
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