U.S. stock-index futures were in bounce mode Tuesday as U.S. retail sales for April came in slightly below expectations and investors awaited remarks by Fed Chairman Jerome Powell.
How are stock-index futures trading?
-
S&P 500 futures
ES00,
+1.59%
climbed 59 points, or 1.5%, to 4,063.75. -
Dow Jones Industrial Average futures
YM00,
+1.29%
surged 396 points, or 1.2%, to 32,555. -
Nasdaq 100 futures
NQ00,
+1.94%
surged 221 points, or 1.8%, to 12,465.75.
On Monday, the Dow industrials
DJIA,
+0.08%
finished less than 0.1% higher at 32,223.42, the S&P 500
SPX,
-0.39%
closed 0.4% lower at 4,008.01, and the Nasdaq Composite
COMP,
-1.20%
fell 1.2% to 11,662.79. The losses follow another losing week for all three major indexes amid a selloff that’s seen the S&P 500 fall to the brink of a bear market and tech shares crater.
What’s driving the markets?
Investors looked determined to shake off a rough start to the week, with Nasdaq futures surging after a bullish session on Hong Kong’s Hang Seng Index
HSI,
+3.27%,
which closed up 3.2%.
U.S. retail sales painted a picture of a solid economic backdrop, rising 0.9% in April, slightly below the 1% advance forecast by economists surveyed by The Wall Street Journal. Auto dealers led the way but most major retail categories posted gains. The increase in sales in March, meanwhile, was raised to 1.4% from an original 0.7%.
Shares of retailing giant Walmart Inc. WMT fell 7% in premarket trading after it reported fiscal first-quarter profit that missed expectations. Analysts were wary of a slowdown for Walmart amid rising inflation given the retailer’s exposure to lower-income customers. Shares of Home Depot, on the other hand, surged after upbeat results.
U.S.-listed shares of China tech names rallied, with Pinduoduo Inc.
PDD,
+0.32%
and Tencent Music Entertainment Group
TME,
+1.22%
each up 7% in premarket, Alibaba Group Holding
BABA,
-1.72%
up over 6% and NetEase Inc.
NTES,
+0.85%
gaining over 3%.
JPMorgan raised the ratings for the stocks of seven Chinese tech firms on Monday, to overweight from underweight. “Only in March analysts at the bank had called the sector ‘uninvestable,’” said Neil Wilson, chief market analyst for Markets.com, in a note to clients.
Market watchers have been trying to determine whether stocks have fallen enough to warrant a bounce for hard-hit equities, notably in the tech sector.
Bank of America’s May global fund manager released Tuesday showed the highest cash levels since the Sept. 11, 2001 attacks in the U.S., the biggest short position on tech stocks since August 2006, and the biggest equity underweight since May 2020.
Other data ahead includes April industrial production and capacity utilization at 9:15 a.m. Eastern and the National Association of Home Builders’ index for May at 10 a.m. Eastern along with business inventories for March.
Federal Reserve Chairman Jerome Powell is due to speak to The Wall Street Journal at 2 p.m., followed by appearances from Cleveland Fed President Loretta Mester, and after the market close, Chicago Fed President Charles Evans.
Along with stock index futures, Treasury yields were rising with that of the 10-year note BX:TMUBMUSD10Y up 3 basis points to 2,909% and that of the three-year note BX:TMUBMUSD03Y up 6 basis points to 2.909%.
See interviews with Fed Chairman Jerome Powell, the CEOs of companies including Wells Fargo, Moderna and FanDuel. Register for virtual access to The Wall Street Journal’s Future of Everything Festival, May 17-19. (Select virtual pass for complimentary access.)
What companies are in focus?
- Shares of Twitter Inc.
TWTR,
-8.18%
fell 1.5% in premarket trading after Tesla Inc.
TSLA,
-5.88%
CEO Elon Musk tweeted that his $44 billion deal for Twitter ‘cannot move forward’ without more data on spam bots. Twitter, meanwhile, said in a statement filed with the U.S. Securities and Exchange Commission that it was committed to its deal to be bought by Musk for $54.20 a share. - Home Depot Inc.
HD,
-0.01%
shares climbed 4.5% in premarket after the home-improvement retailer’s first-quarter revenue and earnings beat Wall Street forecasts. - Citigroup
C,
-0.38%
rallied in the premarket following news that Berkshire Hathaway
BRK.B,
-0.34%BRK.A,
-0.16%
took a nearly $3 billion stake in the bank during the first quarter.
How are other assets trading?
- Oil futures gave up early gains to trade near unchanged, with the U.S. benchmark
CL.1,
+0.08%
near $114.30 a barrel. - Gold futures GC00 rose 0.9%, to trade below $1,830 an ounce.
- In European equities, the Stoxx Europe 600
SXXP,
+1.32%
rose 1.3%, while London’s FTSE 100
UKX,
+0.82%
gained 0.9%. - In Asia, the Shanghai Composite CN:SHCOMP ended 0.6% higher. Meanwhile, the Hang Seng Index HK:HSI finished higher by 3.2% and Japan’s Nikkei 225 JP:NIK rose 0.4%.
