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Stock futures fall slightly ahead of final January session, S&P heads for worst month since March 2020

By on January 30, 2022 0

Traders work on the floor of the New York Stock Exchange at the opening bell on January 25, 2022.

TIMOTHY A. CLARY | AFP | Getty Images

Stock futures fell slightly in overnight trading on Sunday as investors braced for the final day of trading in what could be the worst month for the S&P 500 since March 2020.

Dow futures fell about 80 points. S&P 500 futures fell 0.25% and Nasdaq 100 futures fell 0.35%.

January turned out to be a dismal month for stocks. The S&P 500 heads for its worst month since pandemic-induced market turmoil in March 2020, as investors worry about inflation, supply chain issues and upcoming Reserve rate hikes federal.

The 500-stock average is approaching the correction zone, down more than 8% from its intraday high at the start of the month. The S&P 500 is down 7% in January.

The Dow Jones Industrial Average is also heading for its worst January since March 2020. The Dow Jones is down 4.4% this month.

The Nasdaq Composite, which is about 15% off its record November close, is heading for its worst month since October 2008 and the worst first month of the year ever. The tech-focused average is down 12% in January.

Additionally, the Russell 2000 small cap benchmark is in a bear market.

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Last week, the Federal Reserve indicated that it would likely raise interest rates for the first time in more than three years to combat historically high inflation. Markets are now pricing in five quarter-percentage-point interest rate hikes in 2022.

Major averages have seen wild swings in the past week, with the Dow Jones moving 1,000 points in either direction. The Dow ended the week up 1.3%. The S&P 500 gained 0.8% last week and the Nasdaq was about flat for the week.

“All of this is causing additional market volatility until investors digest this transition period,” said Michael Arone, chief investment strategist at State Street Global Advisors. “On the other hand, the economy should continue to expand, earnings are pretty good. It’s enough to support the markets, but I think they are adjusting to the change in monetary policy, fiscal policy and profits.”

Earnings season continues this week with major reports from Alphabet, Starbucks, Meta Platforms, Amazon and more. About a third of S&P 500 companies reported fourth-quarter earnings, and 77% beat Wall Street earnings expectations, according to FactSet.

“A lot of the time this week will be about whether the corrective low has already been reached or whether last Monday’s intraday low is challenged and breached again,” said Jim Paulsen, chief investment strategist at the Leuthold group. “The longer the S&P stays above last Monday’s low or pulls even further to the upside, the more calm will return and fundamentals may once again begin to dominate emotions in driving the market.”

There is also key economic data this week, the most important of which is Friday’s January jobs report.

—CNBC’s Patti Domm contributed to this report.