Stock futures jump as market looks set to rebound after brutal week

Traders on the floor of the NYSE, June 16, 2022.

Source: NYSE

Stock futures rose in overnight trading on Monday after a brutal week as investors assessed a more aggressive Federal Reserve and growing recession risks.

Dow Jones Industrial Average futures jumped 380 points, or about 1.3%. S&P 500 futures climbed 1.12% and Nasdaq 100 futures also rose 1.14%. US stock markets were closed earlier Monday for Juneteenth.

The major averages just suffered their 10th losing week in 11 on fears the central bank will hike rates aggressively to rein in inflation at the risk of causing an economic slowdown. The S&P 500 fell 5.8% last week for its biggest weekly loss since March 2020, plunging deeper into bear market territory. The equity benchmark is now more than 23% off its all-time high in early January.

The blue-chip Dow Jones slipped 4.8% last week, falling below 30,000 for the first time since January 2021 last week. The tech-heavy Nasdaq Composite fell 4.8% last week, down 33% from its all-time high.

“The recent stock market slump and shift in investor attitudes make a thesis more difficult to establish,” Nationwide chief investment research officer Mark Hackett said. “Investors are acting emotionally, but fundamentals are starting to follow technical weakness.”

Fed Chairman Jerome Powell will testify before Congress on Wednesday and Thursday. Its appearance comes after a recent rate hike of three-quarters of a percentage point, the central bank’s biggest increase since 1994.

Investors will watch incoming data, including existing home sales on Tuesday, to gauge the health of the economy. Recent data showing weak consumer confidence, falling retail spending and a cooling housing market have fueled recession fears as the Fed battles inflation at 41-year highs.

Meanwhile, cryptocurrencies have continued their roller coaster ride. Bitcoin fell to a new 2022 low of $17,601.58 over the weekend before rallying above the $20,000 mark on Monday. The world’s largest cryptocurrency by market capitalization sits 70% below its all-time high from November.

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