Stock Futures Waver After Rate Uncertainty Sparked Selloff
U.S. stock futures wobbled following a two-day selloff on Wall Street fueled by uncertainty over the path of U.S. interest-rate increases by the Federal Reserve.
Futures tied to the S&P 500 and technology-heavy Nasdaq-100 were up 0.1%. Dow Jones Industrial Average futures were flat.
On Monday, the Dow fell by 643 points while the S&P 500 and Nasdaq Composite lost more than 2% each. Stocks have been rattled in recent days as investors reassessed bets that the Fed would start to slow the pace of rate increases. Those expectations had helped fuel a four-week rally for the S&P 500, which came to an end on Friday.
“The euphoria has really fizzled out for equities,” said Susannah Streeter, senior investment and markets analyst at
in London. “The clamor of voices has become louder from central bank policy makers saying, ‘Hold on, we aren’t out of the woods yet.’”
All eyes will be on a speech Friday by Fed Chairman
Jerome Powell
in Jackson Hole, Wyo. Mr. Powell is expected to provide clues on the Fed’s plans for combating inflation that remains well above the central bank’s target.
“Inflation is still a real challenge, and the Fed has to be extremely vigilant and keep monetary policy tight,” Ms. Streeter said.
Investors will also be watching earnings reports Tuesday from a range of U.S. retailers.
shares inched up premarket after its second-quarter earnings topped estimates.
and
are slated to release earnings later.
Meanwhile, data on new-home sales in the U.S. will offer clues on how the sharp rise in mortgage rates is affecting the housing market. Economists polled by The Wall Street Journal expect new-home sales to fall to 574,000 in July from 590,000 in June, which marked a more than 2-year low.
Bonds edged higher Tuesday after selling off in recent days on expectations for interest-rate increases.
The yield on the benchmark 10-year Treasury note ticked down to 3.018% from 3.035% Monday, according to Tradeweb. Yields fall as prices rise.
The dollar, meanwhile, softened after a seven-day rally. The WSJ Dollar Index, which measures the greenback against a basket of other currencies, was mostly flat.
Brent crude, the international benchmark for oil prices, rose 1.4% to $97.79 a barrel after the Saudi Arabian energy minister indicated in an interview with Bloomberg that the OPEC+ oil cartel could cut production.
In Europe, stocks were mixed after data showed eurozone business activity contracted in August for the second consecutive month, though businesses reported easing cost pressures. The pan-continental Stoxx Europe 600 index was down 0.3%.
Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 1.2% and the Hang Seng in Hong Kong down 0.8%. China’s Shanghai Composite slipped less than 0.1%.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
Traders worked at the New York Stock Exchange on Monday.
Photo:
Courtney Crow/Zuma Press
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