U.S. stock futures pointed higher Tuesday, moving upwards after three days of heavy selling on the eve of the key inflation report.
Futures on the Dow Jones Industrial Average
rose 279 points, or 0.9% to 32440.
Futures on the S&P 500
gained 40.75 points, or 1%, to 4028.
Futures on the Nasdaq 100
increased 189.25 points, or 1.6% to 12383.
On Monday, the Dow Jones Industrial Average
fell 654 points, or 1.99%, to 32246, the S&P 500
declined 132 points, or 3.2%, to 3991, and the Nasdaq Composite
dropped 521 points, or 4.29%, to 11623.
Over the last three days, the S&P 500 has dropped 7.2% — the biggest three-day decline since March 20, 2020, as the world was confronted with the coronavirus pandemic.
What’s driving markets
The early rise may give traders thought that a so-called “Turnaround Tuesday” may materialize. Data from Bank of America finds that the best returns for the S&P 500 this year have been on Mondays, though Tuesday’s cumulative loss of 1.2% is far narrower than the 10.6% drop on Thursday and the 7.9% decline on Thursday.
If anything, the corporate earnings news since Monday’s close has been negative, with steep earnings-related declines for companies including lending platform Upstart Holdings
online marketplace Groupon
and fuel-cell maker Plug Power
The broader issue confronting the market is that the Federal Reserve will keep tightening until it sees signs that inflation is getting under control, and there’s no indication that’s anytime soon.
The one asset benefiting is the U.S. dollar
trading around two-decade highs, while gold
is holding its own, and riskier assets including bitcoin
“There is one potential catalyzer this week, that could eventually slow down the market selloff: U.S. inflation data due Wednesday. The consumer price index is expected to have eased to 8.1% in April from 8.5% printed a month earlier. A softer inflation is the only thing that could give hope to investors,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
President Joe Biden is due to give a speech at 11:30 a.m. Eastern outlining his administration’s attempts to bring down inflation.