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All
major Wall Street indexes notched a second straight week of
gains last week, with the S&P 500 rising 1.13%, the Dow gaining
0.24% and the Nasdaq climbing 2.1%.
But near the end of the week, equities lost some momentum after
November's robust U.S. payrolls report challenged hopes for a
less aggressive Fed.
Investors see a 91% chance that the U.S. central bank will
increase the interest rates by 50 basis points next week, with
the rates peaking in May 2023. [FEDWATCH]
The rate-setting Federal Open Market Committee meets on Dec.
13-14, the final meeting in a volatile year, which saw the
central bank attempt to arrest a multi-decade rise in inflation
with record interest rate hikes.
The aggressive policy tightening has also triggered worries of
an economic downturn, with JPMorgan, Citigroup and BlackRock
among those that believe a recession is likely in 2023.
A report from the Institute of Supply Management is expected to
show that the services sector grew at a slower pace in November,
compared with the prior month.
The data is due at 10 a.m. ET and will come on the heels of a
survey last week that showed manufacturing activity contracted
for the first time in 2-1/2 years last month as higher borrowing
costs weighed on demand for goods.
In other economic data this week, investors will also monitor
monthly factory orders, weekly jobless claims, producer prices
and the University of Michigan's consumer sentiment survey for
more clues on the health of the U.S. economy.
At 6:01 a.m. ET, Dow e-minis were down 139 points, or 0.4%, S&P
500 e-minis were down 17.75 points, or 0.44%, and Nasdaq 100
e-minis were down 33.75 points, or 0.28%.
Shares of Tesla Inc fell 1.7% in premarket trading on the
electric vehicle maker's plans to cut December output of the
Model Y at its Shanghai plant by more than 20% from the previous
month.
U.S.-listed Chinese stocks such as Alibaba Group and JD.com
gained about 5.2% each. Reuters reported China was set to
announce the further easing of some of the world's toughest
COVID curbs as early as Wednesday.
(Reporting by Shubham Batra in Bengaluru; Editing by Anil
D'Silva)
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