U.S. stock futures were in a downswing Tuesday morning to start a busy holiday-shortened week of trading jammed with retail earnings, Federal Reserve meeting minutes and an important inflation reading.

The U.S. stock and bond markets were closed on Monday for President’s day.

Futures tied to the S&P 500 (^GSPC) fell 0.7%, while futures on the Dow Jones Industrial Average (^DJI) dropped roughly 200 points, or 0.6%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) were down 0.9%.

Investors will evaluate quarterly financials from Walmart (WMT) and the Home Depot (HD) due out before the bell for updates on the health of the U.S. consumer, which has so far remained resilient in the face of stubbornly high inflation — most recently evidenced by January’s stunning retail sales data out last week.

On Friday, the Dow Jones Industrial Average logged its third-straight losing week for the first time since September, closing down 0.1% for the five-day trading period. The S&P 500 fell 0.3% for the week, its second consecutive week in the red, while the Nasdaq was an outlier, notching a weekly gain of 0.6%.

“There’s a quiet pulse of positivity on the markets with investors still cautious about the direction of interest rates in the United States, but hopeful that recovery elsewhere will lend a hand to trade,” Susannah Streeter, head of money and markets at Hargreaves Lansdown said in a note. “Worries are still hanging around that US inflation will still take significant time to be whipped into a shape which will mean higher rates will have to linger for longer, sentiment which has been supporting the dollar.”

In other areas of the market, Treasury yields ascended, with the benchmark 10-year note rising 5 basis points to yield 3.88% early in the day. The U.S. dollar also climbed higher. On the commodities side, West Texas Intermediate (WTI) crude futures — the U.S. oil benchmark — gained 0.9% to trade around $77 per barrel.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 17, 2023.  REUTERS/Brendan McDermid

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 17, 2023. REUTERS/Brendan McDermid

Later in the week, Wall Street will get a readout of minutes from the Federal Open Market Committee’s last meeting earlier this month.

The release will offer clues about the next rate increase in March, which some investors are now expecting to be 50 basis points after strong economic data and hotter-than-projected inflation readings.

Last week, Fed President Loretta Mester said she would have favored raising interest rates by 50 basis points Feb. 1 rather than the smaller quarter-point rate increase her colleagues opted for.

Traders fretting over inflation and the path forward for interest rates also await the Personal Consumption Expenditures (PCE) price index — the Fed’s most closely watched assessment of how quickly prices are rising across the economy — which is set for release Friday morning.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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