U.S. stock futures move broadly lower ahead of Fed decision, corporate results

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By Scott Kanowsky

Investing.com -- U.S. stock futures slipped on Monday, with traders eyeing the release of the Federal Reserve's latest interest rate decision and a slew of corporate earnings this week.

At 06:55 ET (11:55 GMT), S&P 500 futures traded 41 points or 1.02% lower, Nasdaq 100 futures dropped by 166 points, or 1.36%, and the Dow futures contract declined by 254 points, or 0.75%.

The major Wall Street Indexes had finished in the green in the prior session to log gains for the week. Sentiment has been lifted by hopes that inflation may have peaked and the health of the broader U.S. economy could be holding up against recession fears.

Focus now turns squarely to the two-day Federal Reserve meeting set for Tuesday and Wednesday. While the central bank is widely anticipated to raise interest rates by 25 basis points, its outlook on monetary policy will be closely watched, given that recent data painted a somewhat mixed picture of the world’s largest economy.

The European Central Bank and the Bank of England will also unveil fresh policy decisions on Thursday.

Stocks in Europe and Asia provided mostly weak handovers into the start of the U.S. trading week.

Adding to the caution in Europe was data from Germany showing that the region's largest economy unexpectedly shrank in the fourth quarter. Gross domestic product in the country contracted by 0.2%, down from growth of 0.5% in the prior quarter, stoking concerns that Germany may be edging into a long-foreseen recession. Economists had anticipated that the reading would stagnate.

Inflation in Spain also rose for the first time since July, according to preliminary data. European Union-harmonized consumer prices in the country increased by 5.8% year-on-year, up from 5.5% in December and well above economists' estimates of 4.7%.

Meanwhile, Chinese equities rose after markets in the country reopened following a week-long holiday. Traders are betting that the economy received support from its first Lunar New Year festivities without COVID-19 restrictions in three years. State media reported that domestic travel and consumption had bounced back sharply in the past week.

But broader Asian markets retreated, dragged lower by technology shares in Hong Kong, including Alibaba Group (HK:9988) and Tencent Holdings (HK:0700). A slew of U.S. tech earnings is scheduled to be released this week, with traders keen to find any clues about the health of the industry.

Among the big tech players to provide updates this week are Amazon.com Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), Google-parent Alphabet Inc (NASDAQ:GOOGL), and Facebook-owner Meta Platforms Inc (NASDAQ:META).

Elsewhere, oil markets were weighing the impact of the Lunar New Year holidays on demand in China. By 06:55 ET, U.S. crude futures were 0.03% higher at $79.70 a barrel, while the Brent contract gained 0.14% to $86.52 per barrel.

Additionally, gold futures edged down 0.31% to $1,923.35/oz, while EUR/USD was 0.25% higher at 1.0894.