February 8, 2023

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Dow futures jump 300 points on the first trading day of 2023

Traders on the floor of the New York Stock Exchange, October 21, 2022.

Source: NYSE

Stock futures rose on Tuesday as Wall Street attempted to start the new year on a strong note. Traders also braced for a series of upcoming economic releases this week.

Futures linked to the Dow Jones Industrial Average jumped 300 points, or 0.9%. S&P 500 futures rose 1%, and Nasdaq 100 futures rose 1.1%.

The major averages closed out 2022 with their worst annual losses since 2008, snapping a three-year winning streak. The Dow finished the year down about 8.8%, 10.3% from its 52-week high. The S&P 500 lost 19.4% for the year and remains less than 20% off its high. The Nasdaq, which specializes in technology, is down 33.1% last year.

Inflation, which caused “the worst rout for both stocks and bonds in decades,” was the biggest investor narrative of 2022, according to Greg Pasuk, CEO of AXS Investments. The new year begins on a cloud of concern that a “hard landing” by the Federal Reserve and its anti-inflationary moves could push the economy into recession.

“2022 was marked by a market rout that held back inflation, in part because the year started with both Wall Street and Main Street expecting higher prices to be contained and the Federal Reserve to keep prices low,” he said. “But the sharply opposite reality has held, with inflation soaring.”

He added, “Going into 2023, as prices continue to rise materially, investors would be wise to consider inflation-sensitive assets, as well as cyclical stocks and other stocks that tend to perform well in higher price environments.”

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Investors get a batch of data in the first trading week of the year. The first is S&P’s global manufacturing PMI and construction spending, due out at 9:45 AM and 10 AM ET on Tuesday.

Wednesday is a big day with the Job Opportunities and Employment Turnover Survey, known as JOLTS, due in the morning and minutes from the Federal Reserve’s latest policy meeting due in the afternoon.

They also look ahead to the December jobs report on Friday, which is the final employment report the Fed will have to consider before its next meeting on February 1. There are also several speeches by the Fed Chairs scheduled for Thursday and Friday.