Futures on US stock indices are trading near the day's opening level without a definite direction, as the cautious tone of the Fed speakers tempered enthusiasm that inflation may have reached its peak. Futures on the S&P 500 fell 0.1%, while contracts on the Nasdaq 100 sank only 0.2%. The industrial Dow Jones is also near zero. Asian indices have dropped from previously held positions.
Meanwhile, Treasury yields rose, as did the US dollar, after comments by Federal Reserve Governor Christopher Waller that politicians have several commitments that need to be used in the future before stopping interest rate hikes. The world's leading banks also fear the threat of entrenched inflation, which affects risky assets, even though price pressure is easing. Waller also said that the cycle of increases would continue for some time, noting that the Fed may consider the option of raising rates by only 50 basis points at its next meeting in December.
Investors are betting too much on the latest data, according to which inflation in the US has slowed down. The slowdown is happening much slower than expected, so the Fed needs more data to reassess its plan and attitude toward monetary policy.
At the end of last week, signs of slowing inflation in the US and the prospects for a dovish Fed mood pushed the S&P 500 to its best bull market since June of this year and undermined the dollar's strength. A preliminary November survey by the University of Michigan on Friday showed that consumer inflation expectations in the US rose in the short and long term while sentiment declined.
Investors will also watch the G20 summit in Indonesia this week, where US President Joe Biden and Chinese Leader Xi are expected to meet. The calm in the stock market was also strengthened by the fact that the Democrats managed to retain control of the Senate.
As for other markets, Chinese indices continued to rise on Monday, helped by Beijing's measures to loosen control over COVID, which gives hope that the worst is over.
Cryptocurrencies continued to trade quite volatile, as the sector remains under pressure amid the worsening FTX problems. The rapid drop in the value of key FTX crypto assets and unauthorized withdrawal of funds after filing for bankruptcy suggests that customers have little chance of recovering most of their deposits.
Oil fell after a two-day rally.
As for the technical picture of the S&P 500, after Friday's growth, the bulls continue to hope for a new rally. The main task for buyers now is to maintain the $3,968 support. While trading will be conducted above this level, we can expect continued demand for risky assets. This will create good prerequisites for strengthening the trading instrument and returning $4,000 to control. The level of $4,038 is located slightly higher. A break in this area will strengthen the hope for a further upward correction with an exit from the resistance of $4,064. The most distant target will be $4,091. In a downward movement, buyers must declare themselves in the $3,968 range. A breakdown of this range will quickly push the trading instrument to $3,942 and open up the opportunity to update the support at $3,905.
