U.S. stock futures were pointed to a rebound for Wall Street on Tuesday, on the heels of a sharp selloff, with investors driven by hopes hopes countries have enough in their arsenal to fight rising COVID cases.
The administration of President Joe Biden was expected to lay out a battle plan on Tuesday.
How are stock-index futures trading?
- S&P 500 futures ES00, +0.80% rose 0.7% to 4,591
- Dow Jones Industrial Average futures YM00, +0.79% gained 0.6% to 35,047
- Nasdaq-100 futures NQ00, +0.92% climbed 0.8% to 15,757
On Monday, the S&P 500 SPX, -1.14% fell 1.1% to 4,568.02, the largest one-day point and percentage decline since Dec. 1, based on Dow Jones Market Data. The Dow Jones Industrial Average DJIA, -1.23% closed 433.28 points, or 1.2%, lower at 34,932.16, its weakest since Dec. 3. The Nasdaq Composite Index COMP, -1.24% dropped 1.2% to 14,980.94, the lowest since Oct. 15.
What’s driving the market?
Monday’s volatile action saw the S&P 500 post its biggest three-day percent slide since Sept. 30 and the Nasdaq’s worst such drop since May 12. Markets were hit first by surrounding fears over rising COVID-19 cases from the omicron variant.
Investors are trying to gauge just how much the new omicron variant of coronavirus will slow economic growth, just as central banks are reining in their pandemic-aid spending.
The Biden administration is due to announce a omicron-fighting plan on Tuesday, with 500 million free at-home COVID-19 testing kits due to be distributed to Americans, along with the deployment of federal emergency assistance teams to six hard-hit states and other measures, according to a report in The Wall Street Journal.
Another blow Monday came after Sen. Joe Manchin (D-W.Va.) said he couldn’t support Biden’s$2 trillion spending plan. “That’s $2 trillion that won’t hit the market so soon and help companies boost business at a time when the Federal Reserve (Fed) will be throwing less money onto the financial markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.
Also helping Tuesday’s mood was a Bloomberg report that Manchin and Biden spoke on Sunday evening, as a Washington source said that chat likely left the door open to further negotiations.
“With the rising volatility, we could see Santa taking back the reins from Manchin for the next couple of sessions. Low trading volumes could help exacerbate any rebound,” said Ozkardeskaya.
Some are keeping an eye on Biden himself, after he tested negative for COVID-19 on Monday, following close contact three days earlier with an aide who tested positive, the White House said. He will test again on Wednesday, and carry on with his normal schedule.
Traders checking out early for the holidays, leaving less liquidity and exaggerating some market moves, are also a hurdle for those trying to navigate a shortened week of trading. Markets will close on Friday, Christmas Eve.
The only data on tap for Tuesday are the third-quarter current-account deficit.
Among other assets, oil prices CL00, +1.40% BRN00, +1.20% gave up much of gains from Asia, and were trading flat.
Which companies are in focus?
- Nike NKE, -2.71% shares are rising after the athletic-wear maker’s better-than-expected earnings, despite poor China sales.
- Micron MU, -1.17% is rising after the chip maker delivered a solid forecast and earnings beat expectations.
