US Stock Futures Fall as Commodity Selloff Rattles Markets

US Futures Decline Amid Market Jitters

U.S. stock index futures fell at the start of the week, with Dow, S&P 500, and Nasdaq 100 E-minis showing losses of 0.24%, 0.59%, and 0.86% respectively. The downturn is driven by a sharp selloff in commodities, unsettling investors ahead of a week filled with major corporate earnings and economic data.

Commodity and Energy Sectors Under Pressure

Precious metals experienced a steep decline, with gold dropping as much as 6% and silver tumbling 10% after the CME Group increased margin requirements. Consequently, shares of miners like Newmont and Barrick Mining fell in premarket trading. Energy stocks such as Exxon Mobil and Chevron also dropped over 1.5% as oil prices retreated on easing geopolitical tensions.

Broader Market Impact and Volatility

The selloff extended to the technology sector, with mega-caps like Nvidia and Tesla falling nearly 2%. The market's volatility index, VIX, climbed to a near two-week high, reflecting heightened investor uncertainty. This follows a choppy period influenced by mixed earnings reports and policy speculation.

Outlook for the Week

Investors are bracing for a busy period, with 128 S&P 500 companies scheduled to report earnings. Key economic indicators, including manufacturing PMI data and Friday's nonfarm payrolls report, will also be closely watched for insights into the health of the U.S. economy.

FAQ

Q: Why did precious metals prices fall sharply?
A: The CME Group increased margin requirements for gold and silver, which forced leveraged investors to sell their positions after a significant plunge.

Q: What key economic data is expected this week?
A: Markets are anticipating January's manufacturing PMI, the JOLTS job openings report, and the official nonfarm payrolls report for critical economic insights.

Source: Investing.com