Nasdaq 100 E-Mini Mar '24 Futures Contract Specifications - Barchart.com (2024)

A stock index simply represents a basket of underlying stocks. Indexes can be either price-weighted or capitalization-weighted. In a price-weighted index, such as the Dow Jones Industrial Average, the individual stock prices are added up and then divided by a divisor, meaning that stocks with higher prices have a higher weighting in the index value. In a capitalization-weighted index, such as the Standard and Poor's 500 index, the weighting of each stock corresponds to the size of the company as determined by its capitalization (i.e., the total dollar value of its stock). Stock indexes cover a variety of different sectors. For example, the Dow Jones Industrial Average contains 30 blue-chip stocks representing the industrial sector. The S&P 500 index includes 500 of the largest blue-chip U.S. companies. The NYSE index includes all the stocks traded at the New York Stock Exchange. The Nasdaq 100 includes the largest 100 companies traded on the Nasdaq Exchange. The most popular U.S. stock index futures contract is the E-mini S&P 500 futures contract, which is traded at the CME Group.

Prices - The S&P 500 index (Barchart.com symbol $SPX) posted an all-time high of 4818.62 in January 2022 on optimism that the easing of the Covid pandemic would bolster the global economy. However, stocks ratcheted lower the remainder of the year as soaring inflation prompted the Federal Reserve (Fed) to aggressively raise interest rates. As a result, the S&P 500 finished 2022 down by -19% yr/yr at 3839.50.

Stocks came under pressure in early 2022 after the Fed became concerned about mounting inflation pressures. Fed Chair Powell signaled at the January FOMC meeting that the Fed would begin raising interest rates at the March policy meeting.

Stocks fell further in February 2022 after Russia invaded Ukraine. The U.S. and its allies immediately imposed sanctions on Russian goods, which sent commodity prices soaring and sparked fears that inflation would undercut economic growth and corporate earnings.

Soaring inflation led to sharply higher interest rates through Q2 of 2022, which weighed on stocks. The U.S. CPI in June 2022 surged to a 41-year high of 9.1% yr/yr. The Fed began raising interest rates with a 25 basis point rate hike in March and then increased the pace to a 50 basis point rate hike in May and a 75 basis point hike in June. The 10-year T-note yield soared to an 11-year high of 3.497% in June.

Stocks staged a countertrend rally from June into August of 2022, on hopes that the strength of the U.S. economy would allow the Fed to navigate a soft landing. However, market sentiment soured as the Fed remained hawkish, and stocks sold off into October, with the S&P 500 falling to a 2-year low of 3491.58.

T-note yields surged as the FOMC raised the federal funds target range by 75 basis points for four consecutive meetings from June through November. The 10-year T-note yield climbed to a 15-year high of 4.335% in October.

The S&P 500 recovered into year-end as inflation eased and the Fed slowed the pace of its rate-hike regime. The FOMC, at its December meeting, raised the federal funds target range by 50 basis points to 4.25%-4.50%. Also, the economy held up well due to a strong labor market, with the U.S. December unemployment rate at a 54-year low of 3.5%. In addition, after contracting in the first half of 2022, U.S. GDP expanded at a 3.2% (q/q annualized) pace in Q3 and at a 2.7% pace in Q4-2022.

Earnings growth for the S&P 500 companies slowed throughout 2022. Quarterly S&P earnings growth in Q1-2022 slowed to +11.4% yr/yr from 32.1% in Q4-2021. S&P earnings growth then slowed further to 8.4% in Q2 and 4.4% in Q3. By Q4, earnings growth turned negative to -3.2% yr/yr. On a calendar year basis, S&P 500 earnings in 2022 slowed to +4.8% yr/yr from +52% in 2021.