S&P 500 futures edge lower after seven-day winning streak, best in two years

What’s driving markets

Equity index futures were a fraction softer as traders cooled their heels following a strong rally.

The S&P 500 index has risen for seven sessions in a row, its longest winning streak in two years, gaining 6.3% in the process. Much of the propulsion has again come from big technology stocks. The tech-rich Nasdaq Composite is up 8.3% over an eight-day streak, also the best run in two years.

Driving the advance was a sharp fall in implied borrowing costs after last week’s Federal Reserve statement, and soft jobs data bolstered hopes that rate cuts could soon be on the horizon, according to Derren Nathan, head of equity research at Hargreaves Lansdown.

However, Nathan added: “Stocks may well pause for breath as investors balance the hope for rate cuts with building financial stresses in the economy. And it wouldn’t be the first time it the current cycle of elevated interest rates that the market has been wrong about the timing of the Fed pivot.”

A period of consolidation for stocks was understandable given the extent of recent gains and the lack of important macroeconomic news this week, said Tom Lee, head of research at Fundstrat.

“But…given the bearish positioning by both institutional and retail investors, we believe stocks likely levitate on the absence of macro news,” Lee added.

Fed officials slated to make comments on Wednesday, include Chair Jerome Powell making opening remarks at a Fed research conference at 9:15 a.m.; New York Fed President John Williams giving the keynote speech at that conference at 1:40 p.m.; Fed Vice Chair for Supervision Michael Barr speaks at the NAHB conference at 2 p.m.; and Fed Vice Chair Phillip Jefferson makes the closing remarks at the research conference at 4:45 p.m.

Powell on Thursday is due to deliver a more closely-watched speech.

Companies in line to present their earnings on Wednesday, include Roblox
RBLX,
+16.68%,
Warner Bros. Discovery
WBD,
-13.91%,
and Under Armour
UAA,
+5.27%
before the opening bell rings on Wall Street, followed by Walt Disney
DIS,
+0.09%,
AMC Entertainment
AMC,
-0.78%
and Twilio
TWLO,
+1.46%
after the close.

U.S. economic updates set for release on Wednesday include wholesale inventories for September, due for release at 10 a.m. Eastern.

Companies in focus

• Rivian Automotive Inc. shares
  RIVN,
  +2.24%
  jumped 7% in premarket trade as the EV maker narrowed its quarterly loss and said it ended an exclusivity deal with Amazon.com Inc. for its last-mile electric delivery vans.

• Robinhood Markets Inc.
  HOOD,
  -13.32%
  fell 7% after the trading app reported quarterly revenues that missed expectations.

• Ebay Inc.
  EBAY,
  -4.72%
  dropped 7% after the online marketplace offered a tepid revenue forecast for the holiday quarter amid intensifying competition from Amazon.com Inc.
  AMZN,
  -0.40%
  and others.