Stock futures inch higher as S&P 500 heads for best January since 2019

Stock futures rose slightly in overnight trading as the S&P 500 looks to cap off its best January since 2019.

Futures tied to the S&P 500 added 0.26%, while futures connected to the Dow Jones Industrial Average inched 0.15%, or 49 points, higher. Nasdaq-100 futures gained 0.28%.

The overnight moves followed a pause in what’s been a stellar January for stocks. During regular trading the Dow declined 260.99 points, or 0.77%, while the S&P and Nasdaq Composite fell 1.30% and 1.96%, respectively.

Stocks have rallied to start the year after a brutal 2022 — and the worst year for stocks since 2008. As of Monday’s close, the S&P and Dow are up 4.64% and 1.72% in January, respectively, and headed for their third positive month in four. The Nasdaq Composite has risen 8.86% this month, putting it on pace for its best monthly performance since July.

“The reason I’ve been optimistic on equities to start the year is because revisions are mostly behind us, people got too negative …,” Trivariate Research’s Adam Parker told CNBC’s “Closing Bell: Overtime” on Monday. “That’s not the case. We have an eroding and slowing backdrop, not one that’s tanking.”

A solid January could be a good sign for the market, and potentially foreshadow a continued uptick in the months that follow. Of the five instances in which the S&P gained more than 5% in January after a negative year, the benchmark index rose 30% for the year on average, said Carson Group’s Ryan Detrick in a tweet.

However, a busy week of earnings, with reports from the likes of McDonald’s, Meta Platforms and Amazon, could put this recent rally in jeopardy. Investors are watching closely for comments on how some of the largest companies are faring amid high inflation and fears of slowing consumer spending.

Attention also turns to the latest interest rate decision due out of the Federal Reserve’s latest policy meeting kicking off Tuesday. Traders widely expect a 25 basis point increase, but will monitor commentary for clues into how much further the Fed intends to hike, or when it plans to cut rates.

Companies reporting earnings Tuesday include McDonald’s, Caterpillar, General Motors, Pfizer and Advanced Micro Devices.