As Wall Street sought stability following another negative day for stocks, stock futures increased on Tuesday.
The Dow Jones Industrial Average futures traded 231 points, or 0.7%, higher. The Nasdaq 100 futures rose 1.1% and S&P 500 futures increased by 0.9%.
Futures trades have changed as energy prices have decreased. The U.S. oil benchmark, West Texas Intermediate futures, decreased by more than 1%. Futures for natural gas also decreased.
With the Dow shedding 184 points on Monday, Wall Street is coming off its second consecutive fall. The Nasdaq Composite declined 1.02% and the S&P 500 dropped 0.67%.
After recent remarks by Federal Reserve officials made it plain that the central bank intends to continue its rate hikes, even if they inflict economic hardship, the market has given back some of its summer gains.
Even though recent data indicate that inflation is beginning to drop, investors are beginning to accept the Fed’s seriousness about containing it, according to Rod von Lipsey, managing director at UBS Private Wealth Management.
According to von Lipsey, “We think the market’s summer surge was fleeting and continue to advise investors to be selective and concentrate on defensive stock categories like health care and dividend-paying businesses.”
Investors will receive a number of updates on the status of the economy on Tuesday, including the June FHFA home price index, the August Conference Board consumer confidence survey, and the July Bureau of Labor Statistics release of job vacancies.
Following their worst day since June, stocks declined on Tuesday as investors prepared for a hawkish statement from the Federal Reserve.
To reach 32,909.59, the Dow Jones Industrial Average fell 154.02 points or 0.47%. The Nasdaq Composite dropped just 0.002% to 12,381.30 while the S&P 500 dropped 0.22% to 4,128.73. For a third straight session, both the Dow and the S&P 500 fell.
The S&P 500’s weakest performers were in the real estate, healthcare, and communications sectors. The sector that gained the most in the broader market index, up 3.6% as a result of increased oil prices, was energy.
After the video conferencing business cut its full-year outlook, Zoom Video shares fell 16.5%.
The 10-year Treasury yield increased beyond 3%, and a summer rally that fizzled out amid growing concerns about rate hikes left traders feeling pessimistic.
The S&P 500 and Nasdaq Composite both lost more than 2% on Monday, while the Dow sank more than 600 points. For the Dow and S&P 500, those were the largest one-day declines since June 16. Since June 28, the Nasdaq saw its worst session.
According to Lisa Shalett, chairman of the global investment committee at Morgan Stanley Wealth Management, “This bear in our view has one last act.”
Investors, according to Shalett, are underestimating the risks of an impending recession, rising inflation, and rising earnings expectations.