Futures on US stocks rose slightly on Tuesday night as investors hoped to rely on a solid rally.
Futures on the Dow Jones Industrial Average added 43 points, or about 0.1%. The S&P 500 and Nasdaq 100 futures rose about 0.1% each.
The futures movement occurred when a recent sell-off in the stock market seemed to have stalled. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 rose 2% and the Nasdaq Composite – almost 2.8%.
The Dow has been declining for seven weeks in a row, but shares have stabilized over the past three trading sessions.
Last week, the S&P 500 fell to the limit of a bear market – or 20% below its record high – but now the index has risen 4% since closing on Thursday.
Stocks and other risky assets have come under pressure due to inflation and the Federal Reserve’s attempts to curb rising prices by raising rates, leading to concerns about a potential recession. Fed Chairman Jerome Powell told a Wall Street Journal conference on Tuesday that “there will be no hesitation” about raising rates until inflation is under control.
However, some recent economic data, including job reports and retail sales data for April, still show that the U.S. economy is growing.
“There’s a big difference between stock market adjustments and open bear markets,” said Matt Stacky, senior portfolio manager at Northwestern Mutual Wealth Management. “The difference is that bear markets are almost always associated with some kind of recessionary macroeconomic environment or at least inevitable on the horizon of the forecast for the next 6-12 months. For us, if we sit here today, we just don’t see it.”
A busy week of retail revenue continues on Wednesday, and Target and Lowe report results before the opening call.
Investors will also receive an updated look at the housing market, with data on the start of housing construction and building permits for April to be issued on Friday morning.