U.S. stock index futures rose on Tuesday, a day after entering a bear market ahead of what’s expected to be one of the biggest Federal Reserve interest rate hikes in decades.
What’s happening
-
Futures on the Dow Jones Industrial Average
YM00,
+0.07%
rose 116 points, or 0.4%, to 30617. -
Futures on the S&P 500
ES00,
+0.19%
gained 19.25 points, or 0.5%, to 3773. -
Futures on the Nasdaq 100
NQ00,
+0.46%
increased 89.75 points, or 0.8%, to 11417.
On Monday, the Dow Jones Industrial Average
DJIA,
fell 876 points, or 2.79%, to 30517, the S&P 500
SPX,
declined 151 points, or 3.88%, to 3750, and the Nasdaq Composite
COMP,
dropped 531 points, or 4.68%, to 10809.
Over the last four days, the S&P 500 has dropped 9.9%, in what’s the worst percentage decline over that time span since March 23, 2020, when the U.S. was first confronting the coronavirus pandemic. The now 22% decline from its 2022 closing high put the index into a bear market on Monday.
Related: What investors need to know about the S&P 500 bear market
What’s driving markets
The Federal Reserve’s two-day interest-rate setting meeting kicks off Tuesday, with huge question marks around how the central bank will respond to the fastest inflation in four decades. There’s now growing talk the Fed will hike by least 75 basis points, a move that seemed remote even last week. How the Fed will convey future rate activity is also a big question.
Mark Haefele, chief investment officer for UBS global wealth management, said risks of a Fed-induced recession have increased, and the chances of a recession in the next six months have risen.
“Wednesday’s FOMC meeting, which includes the Fed’s latest economic forecasts, is one of the most significant in recent history and will be critical for the outlook for financial markets. Volatility is likely to remain high over the coming days, as investors consider the potential need to recalibrate their assumptions based on the Fed’s decisions,” he said.
The biggest corporate news came from database giant Oracle
ORCL,
which rallied 13% in premarket trade after beating earnings and revenue estimates for its fiscal fourth quarter, though its first-quarter earnings guidance was below Wall Street estimates.