Wall St set for gains after recent selloff

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Wall St set for gains after recent selloff

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 8, 2022. REUTERS/Andrew Kelly

  • Summary
  • Companies
  • ISM services sector data due at 10:00 a.m. ET
  • Bed Bath & Beyond shares sink after CFO’s death
  • Wall St coming off three straight week of declines
  • Futures up: Dow 0.62%, S&P 0.61%, Nasdaq 0.53%

Sept 6 (Reuters) – Wall Street’s main indexes were set for opening gains on Tuesday as investors returned from the Labor Day weekend to pick up beaten-down stocks after a recent selloff on worries about monetary policy tightening.

Markets started September on a weak note as hawkish comments from Federal Reserve policymakers and data signaling momentum in the U.S. economy raised fears of aggressive interest rate hikes to cool inflation.

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The benchmark S&P 500 (.SPX) closed at a six-week low on Friday as worries about the European gas crisis overshadowed relief from the monthly jobs data which pointed a slight easing of wage pressures.

The index is down nearly 18% so far this year while the tech-heavy Nasdaq (.IXIC) has shed nearly 27% as rising interest rates hurt megacap technology and growth stocks.

Shares of Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) gained about 1% each in premarket trading after suffering sharp losses over the past week.

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“We’re looking at a slight bounce this morning, which I would call a relief rally after Friday’s selloff,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“The reasons for the stock market weakness obviously remain global central banks raising rates to fight inflation. However, while stocks are poised to move lower and probably stay volatile, I don’t see them actually moving down to June’s lows.”

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Data last week signaled resilience in manufacturing activity and the labor market, suggesting the Fed would need to keep raising interest rates in the coming months. read more

Traders see a nearly 70% chance of a third 75-basis-point rate hike at the Fed meeting later this month.

Investors will now focus on the Institute for Supply Management’s survey on services sector activity in August, due at 10:00 a.m. ET. U.S. consumer prices data next week also could influence expectations on monetary policy before the Fed meeting later in September.

At 08:47 a.m. ET, Dow e-minis were up 194 points, or 0.62%, S&P 500 e-minis were up 24 points, or 0.61%, and Nasdaq 100 e-minis were up 64.75 points, or 0.53%.

The CBOE Volatility index (.VIX), also known as Wall Street’s fear gauge, slipped to 25.7 points.

Bed Bath & Beyond Inc (BBBY.O) fell 14.7% after Chief Financial Officer Gustavo Arnal fell to his death from New York’s Tribeca skyscraper. read more

Digital World Acquisition Corp (DWAC.O) tumbled 21.0% after Reuters reported the blank-check acquisition firm that agreed to merge with Donald Trump’s social media company failed to secure enough shareholder support for an extension to complete the deal. read more

Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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