Dow futures drop 100 points after Wall Street’s worst week since February

Stock futures edged up in overnight trading on Sunday as the market looked to continue to rebound from last week’s sell-off triggered by inflation jitters.

Futures on the Dow Jones Industrial Average rose 40 points. S&P 500 futures and Nasdaq 100 futures were both 0.2% higher.

Bitcoin price dropped more than 7% to around $44,000 after Tesla CEO Elon Musk implied in a Twitter exchange Sunday that the electric vehicle maker may have dumped its bitcoin holdings. Last week, Tesla decided to halt bitcoin for car purchases due to environmental concern.

Wall Street came off one of the wildest weeks of 2021 that saw the S&P 500 fall 4% through midweek amid heightened inflation fears. The broad equity benchmark eventually ended the week down 1.4% after a back-to-back rally. The tech-heavy Nasdaq Composite, which got hit particularly hard by higher price pressures, dropped 2.3% last week. The blue-chip Dow fell 1.1% in that period. All three benchmarks posted their worst week since February 26.

“Not only are [last] week’s events a warning sign of how uncomfortable inflation prints can become but also a warning sign of how overbought equity markets have become,” Nikolaos Panigirtzoglou, a managing director at JPMorgan, said in a note.

Data last week showed the Consumer Price Index jumped 4.2% from a year earlier in April, the fastest rate since 2008, which intensified fears that the Federal Reserve could be forced to start tapering its easy monetary policy if higher price pressures are sustained.

The Fed’s minutes from its last meeting, which will be released Wednesday, could offer some clues on policymakers’ thinking on inflation.

Elsewhere, the first-quarter earnings season is wrapping up with more than 90% of the S&P 500 companies having reported their results. So far, 86% of S&P 500 companies have reported a positive EPS surprise, which would mark the highest percentage of positive earnings surprise since 2008 when FactSet began tracking this metric.

Walmart, Home Depot and Macy’s will deliver earnings on Tuesday.