Dow, S&P 500, and Nasdaq Gain Momentum as Holiday-Shortened Trading Week Begins

U.S. stock futures inched upward as the market opened for a delayed, holiday-shortened trading week, influenced by earnings reports, the Federal Reserve’s rate trajectory, and the effects of a robust American dollar.

Futures linked to major indexes kept climbing following a Monday closure for Presidents Day. S&P 500 (ES=F) futures increased by 0.2%, remaining just below the all-time high set in January. Meanwhile, Nasdaq (NQ=F) futures also rose by 0.2%, positioning themselves for a fourth consecutive week of gains, while Dow Jones (YM=F) futures experienced a similar uptick of about 0.2%, recovering losses from Friday.

In recent months, the swift ascent of the dollar (DX=F) has exerted downward pressure on the stocks of major corporations heavily reliant on international markets. Several large-cap companies, including Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Tesla (TSLA), and Meta (META), derive over 50% of their revenue from overseas. These firms noted that their Q4 earnings were negatively impacted and anticipate that their future revenues will similarly suffer due to reduced foreign spending amid a strong dollar.

The dollar index showed an increase on Monday evening, though it has declined from its peak in mid-January 2025.

At the same time, the Federal Reserve remains steadfast in its view that elevated interest rates are necessary to tackle rising inflation. The decision to maintain rates within the 4.25 to 4.5% range comes in the wake of President Donald Trump’s rapidly changing policy directives, particularly concerning tariffs.

“It is critical to gain a clearer understanding of these policies, their implementation, and to foster greater confidence in how the economy will react” before proceeding with any further rate cuts, stated Fed Governor Michelle Bowman on Monday.

Earnings season is ongoing, with results from 46 S&P 500 companies expected this week. Investor attention will be particularly focused on Thursday, when Alibaba (BABA), Walmart (WMT), and Dropbox (DBX) are set to announce their results. On Tuesday, Devon Energy (DVN), Oxy (OXY), and Toll Brothers (TOL) will also release their last-quarter earnings.