U.S. stock futures were steady at the start of trading this week, after last week's rally in markets fueled by the decision to cut interest rates, which led to the index recording a record closing level.
Futures for the Dow Jones Industrial Average, which includes 30 stocks, added just 4 points, remaining near flat, while futures for the S&P 500 and Nasdaq 100 were little changed.
The moves come after a successful week on Wall Street, supported by the Federal Reserve's decision to cut interest rates by 50 basis points, the first cut in four years.
The effect of lowering interest rates on the stock market
“I view this week’s rate cut as a signal that the Fed is prepared to act quickly if it needs to act as an insurance policy against excessive labor market weakness,” Ronald Temple, chief market strategist at Lazard, said in a note on Friday.
The reality is that a 25 or 50 basis point cut won't significantly change the near-term economic trajectory, but the signal is still important, and markets responded the next day by pushing the S&P 500 to a new record high.
Investors will be watching economic data on Monday on the services and manufacturing sectors. They will also be watching speeches from Atlanta Fed President Raphael Bousik, Chicago Fed President Austin Goolsbee and Minneapolis Fed President Neel Kashkari for insights on what the central bank will do next.
US stocks performance last week
Despite some volatility following the initial rate cut announcement, stocks have been rising in the days since.
The Dow Jones Industrial Average rose 38.17 points, or 0.09%, at the close of trading on Friday, September 20, to 42,063.36. The S&P 500 index closed down 11.09 points, or 0.19%, at 5,702.55. The Nasdaq Composite index fell 65.66 points, or 0.36%, to 17,948.32.
During the week's trading ending at the end of Friday's session, the Dow Jones Industrial Average rose by 1.62%, the S&P 500 gained 1.36% for the week, and the Nasdaq Composite gained 1.49% for the week.
