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Traders work on the floor of the New York Stock Exchange during morning trading on Sept. 23, 2024.
Michael M. Santiago | Getty Images
U.S. stock futures were little changed Monday after the S&P 500 and Dow Jones Industrial Average posted new record closes.
Futures tied to the 30-stock Dow slipped 36 points, or 0.08%. S&P 500 futures inched down 0.09%. Nasdaq 100 futures dipped 0.14%.
Earlier in the day, the S&P 500 rose 0.28% and the Dow added 0.15%, resulting in closing records for both indexes. The Nasdaq Composite ended the session up 0.14%.
The gains were modest but appeared to be a continuation of last week's rally after the Federal Reserve cut interest rates by a half percentage point. The fed funds rate now sits at a range of 4.75% to 5.00%.
Rate-sensitive sectors such as utilities and financials have moved higher in recent weeks in anticipation of the Fed's cuts. There are now four sectors in the S&P 500 outperforming the market in 2024, compared to just two sectors back in July, according to Paul Hickey, co-founder of Bespoke Investment Group.
"There's been a lot moving underneath the surface. … You've seen the baton passed from these megacap stocks to the broader market," Hickey said on CNBC's "Closing Bell: Overtime" on Monday.
While traders have cheered the outsized rate reduction, the market will likely experience heightened volatility over the coming weeks, according to Quincy Krosby, chief global strategist for LPL Financial.
"Given how valuations have edged higher on the back of the market's post Fed momentum, the market will be highly sensitive to any indication that the economy is softening at a faster pace," she said.
Traders will mull over fresh economic data on Tuesday, with the Conference Board's consumer confidence reading for September due. The Richmond Fed manufacturing index for this month will also be out in the morning.
AutoZone and KB Home are also expected to post quarterly results.
Small caps to grow at a multiple of the ‘Magnificent Seven,’ says Richard Bernstein
Small caps are poised to see massive gains over the next few months, according to Richard Bernstein of Richard Bernstein Advisors.
"The reason, I think, that we're such big bulls on mid-caps and small caps is that that's where the earnings growth is forecasted to be," the firm's chief executive officer and chief investment officer told CNBC's "The Exchange" on Monday. "By the end of this year [or] early next year, we're going to find that small caps … are going to grow at a multiple of what, say, the 'Magnificent Seven' are going to grow at."
He added that while this small-cap performance isn't particularly unusual in a trough, it's unusual for it to be happening when the Federal Reserve is "actually easing into this accelerating profits environment" rather than tightening.
"As profits rev up, we should see, normally, the economy just gets stronger, naturally," he continued. "Now we've got the Fed easing on top of that. That's like putting fuel on the fire."
When looking at deglobalization as a key investment theme, Bernstein anticipates that mid-cap industrial stocks that have a focus on the U.S. economy in particular will be the "big growth beneficiaries."
"As globalization contracts, we have to realize that it's not just semiconductors that open up the United States to national security implications," he said. "It's the fact that we don't produce anything here in the United States. That's basically what our trade deficit shows. We think that presents a tremendous opportunity."
— Sean Conlon
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading:
- Snowflake — Shares of the data cloud company fell 3% after Snowflake announced a proposed private placement of $2 billion of convertible senior notes.
- AAR — The defense stock rose nearly 4%. In the first fiscal quarter, AAR reported adjusted earnings of 85 cents per share, up 9% from the year-ago period. Revenue came in at $661.7 million, up 20% from the prior year.
The full list can be found here.
— Hakyung Kim
Stock futures open little changed
U.S. stock futures were flat Monday night.
Dow Jones Industrial Average futures slipped just 23 points, or 0.05%. Futures tied to the S&P 500 and Nasdaq 100 inched down 0.06% and 0.1%, respectively.
— Hakyung Kim
English (US) ·