Stock futures are flat as a huge week of economic data kicks off

March 29, 2022: -Stock futures were steady Monday morning as a week filled with vital economic reports kicked off, and investors keep a close eye on the Federal Reserve’s planned interest rate hikes.

Futures tied to the Dow Jones Industrial Average decreased 3 points, while S&P 500 futures increased 0.1%. Nasdaq 100 futures added 0.1%.

Shares of Tesla popped over 5% in premarket trading on Monday on news it wants to split its stock to pay a stock dividend to shareholders.

The Securities and Exchange Commission filing said Tesla will ask at its annual shareholder’s meeting “for an increase in the number of authorized shares of common stock to enable a stock split of the Company’s common stock in the form of a stock dividend.”

On Monday, parts of The Treasury yield curve inverted, raising some recession concerns. On Monday, the yield on the 5-year Treasury note increased to 2.6361%, while the 30-year yield was down less than one basis point to 2.6004%.

However, the primary yield spread that traders watch the spread between the 2-year and the 10-year rate, remained positive.

The Dow and S&P 500 increased on Friday to close out their second consecutive winning week. The Dow gained 153 points or 0.4%. The S&P 500 advanced 0.5% and has erased its losses since Russia invaded Ukraine in late February. Although the Nasdaq Composite dipped 0.2% but still finished the week in the green.

The moves came as investors continued to monitor developments in Russia’s war on Ukraine and expectations that the Fed is planning to hike interest rates.

“It seems the skyrocketing move higher with commodity prices has taken a break, allowing investors a chance to pile back into equities,” said Edward Moya, senior market analyst at Oanda. “Geopolitical risks remain very elevated, and the rally in equities over the last two weeks is impressive. The U.S. economy is still in a nice shape, but buying every stock market dip probably won’t be the attitude for most traders in the future given how hawkish the Fed has turned.”

Investors continue to keep a close eye on the Fed. This year, Wall Street firms from Goldman Sachs to Bank of America penciled in half-point hikes in future Fed meetings after the central bank’s chair Jerome Powell vowed to be tough on inflation and said rate increases could become more aggressive if necessary.

On Friday, the benchmark 10-year yield touched a fresh multi-year high of 2.5% as investors priced in an aggressive rate hike cycle, helping lift financial stocks while tech stocks pulled back.