S&P 500 Futures dribble as hurricane Ida, covid woes challenge Fed Chair Powell led optimism

S&P 500 Future seesaw around record top amid mixed catalysts.
Fed’s Powell struck measured remarks over tapering at Jackson Hole and propelled markets on Friday.
Halt in US energy output, worsening virus conditions and a light calendar test momentum traders.

Anil Panchal FXStreet

S&P 500 Futures struggle to extend Friday’s heavy upside while defending 4,500 breakout, up 0.05% by the press time, during Monday’s Asian session.

Alike other risk barometers, the US stock futures also cheered Federal Reserve Chairman Jerome Powell’s measured response on tapering. However, coronavirus and hurricane Ida, not to forget geopolitical tensions between the US and China, as well as Taliban versus the West, challenge the market sentiment and keeps the S&P 500 Futures pressured.

Fed Chair Powell buoyed global risk appetite on Friday, despite signaling taper this year, as the central banker refrained from offering any exact timing of tapering and indicated a gap between the taper and rate hike. Also, comments like “We will be carefully assessing incoming data and the evolving risks,” offered extra confirmation to the markets that the easy money policy is here to stay, at least for now. However, category 4 hurricane Ida and worsening virus conditions challenged the risk-on mood afterward.

After damaging the US energy output, Hurricane Ida weakened to a category 3 storm. The fears of barges have broken loose in Louisiana and power off in New Orleans were marked by CNN.

Read: WTI traders bracing for impact at 10:00 GMT

Elsewhere, Australia refreshed record top infections during the weekend and daily covid cases were high in the UK as well. Further, Japan’s Health Minister was worried about the concerns of removing the virus-led emergency on the expiry date of September 12. Alternatively, New Zealand’s cases of virus eased and the government is up for deciding on Auckland’s lockdown whereas vaccine optimism gains a momentum of late.

It’s worth noting that the Western dislike of the Taliban’s holding of power in Afghanistan and the Sino-American tussles over the virus origin act as extra catalysts to weigh on the market sentiment.

Looking forward, a light calendar in Asia and off in the UK restrict short-term market moves during the key week comprising the US Nonfarm Payrolls (NFP).

Read: Powell Sent the Dollar Lower. Will the August jobs data bring it back?

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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