U.S. stock futures pulled back in early trading Monday as Wall Street barreled into a holiday-shortened trading week.
Equity and bond markets will be closed for Thanksgiving on Thursday and end trading at 1 p.m. ET on Friday.
Futures tied to the S&P 500 (^GSPC) sank 0.5%, while futures on the Dow Jones Industrial Average (^DJI) fell 80 points, or 0.2%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) declined 0.8%.
Shares of Disney (DIS) roared 9% pre-market after the media giant made a surprise announcement late Sunday that former chief executive Bob Iger will return to lead the company as CEO, effective immediately.
The U.S. dollar gained against other currencies as a series of COVID-related deaths in China resurfaced fears the country may implement fresh restriction to mitigate recent outbreaks. Oil edged lower, with West Texas Intermediate (WTI) crude futures below $80 per barrel Monday morning.
Moday’s moves come after a lackluster week on Wall Street, with sentiment weighed down by renewed concerns over higher interest rates. The benchmark S&P 500 was down about 0.7% for the period and the Nasdaq 1.6%, while the Dow was roughly flat.
Historically, the week of Thanksgiving has tended to be bullish. Over the past half century, the S&P 500 has gained an average 0.5% during the holiday week and achieved a positive return 68% of the time, according to data from Schaeffer’s Investment Research. The Wednesday before Thanksgiving has been positive 78% of the time at an average gain of 0.3%, while the day after, 66% of the time, averaging a 0.2% increase.
Investors are in for a quiet few days. Minutes from the Federal Reserve’s November rate-setting meeting due out Wednesday are the highlight of a light economic calendar this week. On the corporate side, a few more earnings are set for release, including Dell Technologies (DELL), HP (HPQ), Dollar Tree (DLTR), and Nordstrom (JWN).
The readout of minutes from the FOMC, which sets monetary policy, is likely to show officials planning a half-point rate hike at their December meeting.
DataTrek’s Nicholas Colas points out that the odds for more aggressive monetary policy next year increased last week, both in terms of where the federal funds rate will peak and where they end next year.
About one week ago, futures pointed to 81% to 19% odds on a 50- versus 75-basis-point rate hike next month after a lighter consumer price index. After hawkish assertions from officials about the need for further rate increases, the odds of a 0.75% hike have moved up slightly to 24%.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc