U.S. equity futures nudged lower Monday morning as investors digested last week’s volatility and awaited a fresh wave of economic data and earnings reports. After a wild week that saw the Dow Jones Industrial Average close above 50,000 for the first time, traders are balancing optimism with caution.
S&P 500 futures were down 0.2%, Nasdaq 100 futures slipped 0.3%, and Dow futures fell 37 points, or 0.1%, signaling a cautious start to the week.
Relief Rally in Tech, But Uncertainty Lingers
The pullback in futures comes after a tech-led rout earlier in the week, which weighed on the major averages and even saw Bitcoin briefly sink below $61,000. Friday’s session brought relief, however, with the Dow surging 1,200 points (2.5%) and the S&P 500 and Nasdaq up roughly 2% each.
Software stocks, which had been the epicenter of selling pressure, rebounded sharply. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 3.5%, marking its first gain since late January when it entered bear market territory. Salesforce and other large software names also closed higher.
“After an eight-day losing streak, buyers finally stepped back into the software space on Friday, underpinning a much-needed relief rally as the tech sector approached key support near the November lows,” said Adam Turnquist, chief technical strategist at LPL Financial.
Still, Turnquist warned that the broader tech complex remains rangebound and will need renewed momentum to lift the market sustainably. “The S&P 500 will likely struggle to reach 7,000 without more participation from tech, especially software,” he added.
Eyes on Jobs, Inflation, and Earnings
This week’s market focus is split between economic data and corporate earnings. Several Federal Reserve officials, including Governors Christopher Waller and Stephen Miran, are scheduled to speak, offering clues on the Fed’s next moves.
Wednesday brings the delayed January jobs report, postponed due to the partial government shutdown. After ADP reported a surprisingly weak 22,000 private payroll gain in January, economists now expect the official report to show 55,000 new jobs, a figure that could influence Fed policy expectations.
Friday’s January consumer price index reading is also highly anticipated, with consensus pointing to a 2.5% annual increase. Investors will be watching both reports for signs of lingering inflationary pressure or continued labor market softness.
On the corporate front, the market will digest earnings from household names such as Coca-Cola and Ford Motor on Tuesday. Strong results could reinforce the recent rotation out of tech and back into cyclical sectors, which have benefited from last week’s market rebound.
Balancing Optimism and Risk
After a week of dramatic swings, the market’s message is clear: relief rallies are welcome, but uncertainty remains. Tech must stabilize and economic data must align with expectations for the major averages to sustain their gains.
For now, traders are cautiously watching every indicator — from jobs to CPI to earnings — for signals that the post-rally calm is here to stay, or if the next wave of volatility is just around the corner.