Stock futures plunge after two consecutive days of gains on Wall Street

Stock futures fell slightly in overnight trading on Tuesday after two straight days of gains on Wall Street.

Dow Jones Industrial Average futures fell 55 points. S&P 500 and Nasdaq 100 futures both fell just 0.2%.

Investors shrugged off some signs of an economic slowdown ahead of a key inflation reading. The S&P 500 gained nearly 1%, up for a second straight day. The 30-stock Dow advanced more than 260 points on Tuesday, while the tech-heavy Nasdaq Composite rose 0.9%.

Target cut its earnings forecast on Tuesday, saying it plans to shed excess inventory. The development highlighted the risks associated with economic growth in a context of soaring inflation. Meanwhile, the Atlanta Federal Reserve’s GDPNow tracker showed a growth rate of just 0.9% for the second quarter, down from 1.3% last week.

“[The] the market may continue to reflect concerns about tightening financial conditions and slowing earnings growth,” Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said in a note.

All eyes will be on Friday’s consumer price index for May. Many believe the print will be crucial to the Fed’s policy trajectory and whether the central bank continues to raise rates in 50 basis point increments.

The stock market had a roller-coaster year as aggressive Fed rate hikes stoked recession fears. The S&P 500 is down nearly 14% from its all-time high reached in January. The equity benchmark briefly dipped into bearish territory on an intraday basis last month.

“The question is whether this implied slower rate of tightening is attributable to the belief that the Fed will achieve its policy objectives or because the economy will tip into recession,” said Gargi Chaudhuri, head of investment strategy. iShares at BlackRock. “We believe the United States will avoid a recession.”

A slew of retailers and consumer companies will release their quarterly results on Wednesday, including Campbell Soup, Ollie’s Bargain Outlet and Five Below.

Stock futures plunge after two consecutive days of gains on Wall Street

Source link Stock futures plunge after two consecutive days of gains on Wall Street

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