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Title: U.S. Futures Edge Lower; Inflation Data, Banks Earnings Due This Week

Jan 10, 2022 06:55AM ET

By: AnalysisWatch

US equity markets opened slightly weaker on Monday, with the technology sector underperforming ahead of this week's release of key inflation data that could point to an early Federal Reserve rate hike in 2022.

At 7 a.m. ET (1200 GMT), the Dow futures contract remained unchanged, while the S&P 500 futures contract fell 5 points, or 0.1 percent, and the Nasdaq 100 futures contract fell 35 points, or 0.2 percent.

Wall Street's major indices have had a shaky start to the year, with the tech-heavy Nasdaq Composite posting four straight days of losses last week as rising expectations of interest rate hikes by the Fed pressured a sector whose sky-high valuations owe much to assumptions of easy money for years into the future.

Against this backdrop, investors will be fully focused on the consumer price inflation data due on Wednesday. The consumer price index is expected to rise above 7% year-on-year, approaching a four-year high, underscoring why the Fed could begin its rate hike cycle as early as March.

Hearings on the nomination of Federal Reserve Chairman Jerome Powell on Tuesday and Fed Governor Lael Brainard for the post of vice chairman on Thursday will also be closely watched for clues about the future of monetary policy.

Influential investment bank Goldman Sachs expects the Fed to raise rates four times this year and begin reducing its balance sheet by July at the latest.

In corporate news, Tesla will be in the spotlight on Monday after Goldman Sachs named the electric car maker its top pick for 2022, saying innovation in the sector will continue to drive growth for investors.

Major US banks begin releasing fourth-quarter results later this week, with JPMorgan Chase, Citigroup, and Wells Fargo all due to report on Friday. Analysts expect core earnings at major US banks to rise in the fourth quarter thanks to higher Treasury yields.

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