U.S. stock futures were little changed on Tuesday morning after the major averages staged a big reversal to start the month.
The Dow Jones Industrial Average traded up 47 points, or 0.1%. The S&P 500 was up less than 0.1%, and Nasdaq Composite dipped 0.2%.
On Monday, the major averages posted a wild up-and-down session with the Nasdaq Composite rising 1.63% in a late-day comeback, despite falling as much as 1.07% earlier in the day. The S&P 500 rose 0.57% after hitting a new 2022 low earlier in the session.
Meanwhile, the Dow gained 84 points, or 0.26%. At its session lows, the Dow was down more than 400 points.
Those moves come on the back of a brutal month in April for stocks. April was the worst month since March 2020 for the Dow and S&P 500. It was the worst month for the Nasdaq since 2008.
“We think the data continues to paint a picture of extreme fear and a contrarian opportunity for longer-term investors, even though there is scope for further movement/more downside in the very near term on some gauges,” RBC strategist Lori Calvasina said in a note to clients.
The benchmark 10-year Treasury yield also climbed to a new milestone on Monday. The bond yield hit 3.01% during the session, its highest point since December 2018. However, it fell back on Tuesday, possibly easing selling pressure on stocks.
Those moves come ahead of a widely anticipated Federal Reserve meeting.
Wall Street is largely expecting interest rates the central bank to raise rates by 50 basis points this week, with some investors believe expectations of aggressive monetary tightening from the central bank are already priced into markets.
The Federal Open Market Committee will issue a statement at 2 p.m. ET on Wednesday. Fed Chair Jerome Powell is expected to hold a press conference at 2:30 p.m.
Billionaire hedge fund manager Paul Tudor Jones said on CNBC’s “Squawk Box” Tuesday that, with the Fed tightening and the economy slowing, capital preservation should be the main goal for investors.
″“You can’t think of a worse environment than where we are right now for financial assets. Clearly you don’t want to own bonds and stocks,” Jones said.
The expected rate hike comes as there are growing concerns about the global economy, due in part to China’s lockdowns and the war in Europe.
“Markets continue to be hostage to the China Covid-19 response and the geopolitics, which are overshadowing what is still a very resilient fundamental picture,” JPMorgan strategist Mislav Matejka said in a note to clients.
A number of consumer-oriented companies are still reporting earnings this week. Shares of Avis Budget jumped more than 6% during extended trading after the car company surpassed earnings expectations on the top and bottom lines.
Shares of Clorox were under pressure after the home products company cut its full year gross margin outlook, citing inflation. DuPont’s stock fell more than 2% after its quarterly report showed operating margin shrinking year over year.
Chegg’s stock price tumbled nearly 30% during extended trade after the textbook company issued weak guidance for the full year despite exceeding earnings expectations.
Elsewhere, shares of Restaurant Brands and Pfizer were little changed in premarket trading after beating expectations on the top and bottom lines Tuesday morning.
Airbnb, AMD, Lyft and Starbucks are expected to report earnings after the bell Tuesday.
Traders will also watch for the latest reading of the Job Openings and Labor Turnover (JOLTS) data that is expected at 10 a.m. ET on Tuesday. Data on auto sales for April is also expected on Tuesday.
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