U.S. stock futures rose before the bell on Tuesday as investors welcomed a pullback in rising oil prices, refocusing attention on the ongoing debate over the economy and interest rates.
S&P 500 futures (ES=F) rose 0.4%, while the Nasdaq 100 (NQ=F) rose 0.5% as tech mega-caps began to recoup some of the previous session’s losses . Dow Jones Industrial Average futures (YM=F) rose about 0.2%.
Stocks are expected to regain the winning trend of recent months as Monday’s headwinds ease. Oil prices are retreating as Middle East tensions cool somewhat, while the 10-year Treasury yield (^TNX) briefly fell after rising back above the key 4% level on Monday.
Some “Magnificent 7” stocks were beginning to regain lost ground amid negative headlines, with Amazon (AMZN), Apple (AAPL) and Alphabet (GOOG, GOOGL) rising. Meanwhile, Nvidia (NVDA) took advantage of a closing gain as the chip heavyweight’s partner Hon Hai flagged “crazy” demand for AI.
But the market is still grappling with dashed hopes for gigantic interest rate cuts, while lingering concerns about a recession got a boost when China failed to deliver the big expected stimulus on Tuesday. Shares in Hong Kong (^HSI) plunged more than 9% as a strong stimulus-driven rally in Chinese stocks fizzled out.
Read more: What the Federal Reserve’s rate cut means for bank accounts, CDs, loans and credit cards
On that topic, Federal Reserve policy is “well positioned” to achieve a “soft landing” for the economy, New York Fed President John Williams told the Financial Times. Meanwhile, Federal Reserve Governor Adriana Kugler said data will continue to drive rate decisions.
Those comments sharpened investors’ attention on Thursday’s CPI inflation report, which will be scrutinized for reasons for the Federal Reserve to change its plan to maintain 0.25% rate cuts going forward.
In the corporate sector, PepsiCo (PEP) kicked off earnings season, posting a surprise drop in quarterly revenue and lowering its sales growth forecast for 2024. Shares of the snack and beverage giant fell ahead of the marketing.