US stock index futures fell early Wednesday as key averages jumped in regular trading hours, attempting to recoup some losses after weeks of sell-offs.
Futures contracts tied to the Dow Jones Industrial Average lost 264 points, or 0.86%, while S&P 500 futures were down 0.94%. Nasdaq 100 futures dropped 0.97%.
during regular business The Dow rose 641 points, or 2.15%, on Tuesday. The S&P 500 added 2.45%, turning it into its best day since May 4. The benchmark index fell 5.79% last week in its worst weekly performance since March 2020.
The Nasdaq Composite advanced 2.51% on Tuesday, after a tenth week loss over the past 11 weeks.
Growing fears that the economy will slip into recession have hit stocks recently. The Federal Reserve raised interest rates by three-quarters of a percent last week, the central bank’s biggest rate hike ever. since 1994,
The move comes as the Fed tries to pacify inflation, which has hit a 40-year high.
“We do not see a US or global slowdown in ’22 or ’23 in our base case, but it is clear that the risks of hard landings are increasing,” UBS said in a note to customers on Tuesday.
“Even if the economy slips into recession, it should remain shallow given the strength of consumer and bank balance sheets,” the firm said.
Meanwhile, Goldman Sachs believes the prospects for a recession are rising for the US economy, adding that recession risks are “higher and more front-loaded.”
“The main reason is that our baseline growth trajectory is now lower and we are concerned that the Fed will feel compelled to react forcefully to higher headline inflation and consumer inflation expectations if energy prices continue to rise, even if The activity slows down rapidly.” The firm said in a note to customers.
Tuesday’s rally raises questions about whether the action is a short-term respite after weeks of selling, or a meaningful change in sentiment. Tuesday’s strength was broad-based. All 11 S&P sectors posted gains on the day, with energy rising 5.8% along the way.
Oppenheimer said in a note to clients on Tuesday, “We expect the market to remain volatile until the actions taken so far by the Federal Reserve … and further action has time to work through the system.” Is.” ,
Fed Chair Jerome Powell will appear before Congress on Wednesday, kicking off two days of testimony. On the earnings front, KB Home will release the results after the market closes on Wednesday.