Wall Street futures rose more than 1% on Tuesday, in a bid to recover after a week of heavy losses as investors assessed the US Federal Reserve’s more aggressive policy and increased chances of a recession.
Particularly, the Dow futures record an increase of 479 units or 1.60% to 30,348 units while the futures of the S&P 500 strengthened by 65.50 points or 1.79% to 3,741.50 points. Alongside, Nasdaq futures gain 206 points or 1.82% at 11,503.25 points.
Markets have been anticipating the Fed’s aggressive rate hikes in July and September to fight rising inflation, with some investors becoming increasingly skeptical about whether the Fed can make a slight economic landing and to avoid a recession, notes the Reuters agency.
Goldman Sachs now sees a 30% chance of the US economy going into recession next year, up from its previous forecast of 15%.
All eyes are now on Fed Chairman Jerome Powell’s statement to the Senate Banking Committee on Wednesday for indications of future interest rate hikes. Its deposit comes after the recent 0.75 unit rate hike, the largest rate hike since 1994.
The three indicators recorded last week the 10th week of losses in 11 weeks, due to fears that the Fed will aggressively raise interest rates to curb inflation, with the risk of causing a recession. The S&P 500 fell 5.8% last week, marking its biggest weekly loss since March 2020, falling deeper into the bear market. In particular, it is falling more than 23% from its record at the beginning of January.
The Dow also slipped 4.8% last week, falling below the psychological 30,000 mark for the first time since January 2021. The Nasdaq also fell 4.8% last week, slipping 33% from its historic high.
Investors, meanwhile, are expecting a number of financial data today, including sales of existing homes, to assess the health of the economy. Recent data showing low consumer confidence, falling retail sales and a “freeze” in the housing market have fueled fears of a recession as the Fed battles inflation at a high of 41 years.
Source: Capital
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