U.S. stock futures rose early Friday as traders sought to see if the S&P 500 would roll into bear market.
The futures associated with the Dow Jones Industrial Average advanced 196 points, or 0.63%. The S&P 500 futures traded up 0.76%, while the Nasdaq 100 futures rose 1.06%.
The move comes after another bad day on Wall Street. The Dow and Nasdaq, meanwhile, are down 0.8% and 0.3%, respectively.
The S&P 500 is down 0.6% and is now down 18.6% from its record high in early January. The index also reached an all-time high of 19% intraday, reaching earlier this year. At these levels, the benchmark index is in the throes of a bear market entry – many on Wall Street have defined it as a 20% decline from a 52-week high.
Stocks are under pressure this week – the S&P 500 and Nasdaq each lost more than 3%, and the latest quarterly figures from big box retailers like Walmart and Target as Dow 2.9% raise concerns about a weak consumer base and decades of high inflation. The ability of companies to do. Target and Walmart have come down sharply since posting their quarterly results this week.
Glenview Trust CIO Bill Stone writes, “Although many cross-currents are currently causing sell-offs, the recent acceleration of the stock fall is probably due to fears surrounding US consumers,” Glenview Trust CIO Bill Stone wrote. “For the first time since Covid, retailers are stuck with some extra inventory. Costs are also affecting their earnings due to inflation.”
“Finally, there is evidence that lower-level consumers are feeling the pinch due to rising prices,” Stone said.
Ross Stores was the latest retailer to drop revenue after posting. The stock has lost more than 22% in after-hours trading. CEO Barbara Rentler said that “after a stronger start than planned at the beginning of the period, sales performed less than the quarterly balance.”
Meanwhile, the Federal Reserve has indicated that it will continue to raise interest rates in an effort to cope with the recent surge in inflation. Earlier in the week, Chair Jerome Powell said: “We would not hesitate to do so if it involves moving past the levels of understanding in a fairly broad sense.”
That tough stance on monetary policy has raised concerns this week that the Fed’s move could push the economy into recession. On Thursday, Deutsche Bank said the S&P 500 could drop to 3,000 if there is an impending recession This is 23% less than the closing on Thursday.
Stocks have struggled to find their position for nearly two months, with the Dow on the move for its eight consecutive weekly declines. The S&P 500 and Nasdaq have moved towards a seven-week losing streak.
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