US stocks were poised for a rebound from a three-day rout that has wiped out a healthy chunk of 2024’s market gains. Futures tied to the S&P 500 (ES=F) were up 0.9%, while those on the tech-heavy Nasdaq (NQ=F) rose 1%. Dow Jones Industrial Average (^DJI) futures (YM=F) rose 0.8%.
Stocks got crushed on Monday, part of a two-day tailspin on Wall Street that served as a boisterous reaction to fresh concern over the health of the US economy and its labor market. The S&P 500 (^GSPC) had its worst day since 2022 and capped its worst start to any month since 2002.
The benchmark has shed around 6% in the past three sessions, bringing year-to-date gains back to around 9%.
Though stock futures ebbed from a larger overnight rally, early signs pointed to a recovery. Wall Street’s “fear gauge” — the CBOE Volatility Index (^VIX) — touched its highest level since the early days of the COVID-19 pandemic on Monday. On Tuesday, it fell back to earth, to levels seen often in 2022.
Some of the market’s biggest names also were aiming for a rejuvenation. The “Magnificent 7” stocks lost more than $650 billion in market cap on Monday. On Tuesday, that looked set to change. Nvidia (NVDA), which led the way down, rose over 3% before the market open. Tesla (TSLA), Microsoft (MSFT), and Meta (META) all rose more than 1%.
Cryptocurrencies, which weren’t spared from the rout, also rose in tandem with the optimism. Bitcoin (BTC-USD) was up 7%, rising back above the $55,000 level.
The coming days — and weeks — will provide key signals for what comes next. As Yahoo Finance’s Myles Udland writes, stocks still have the same problem waking up Tuesday that they did Monday: the Federal Reserve. The Fed has come under mounting pressure to act, as around three-quarters of traders now expect a 50-basis-point rate cut at its next meeting.
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