Equity futures fall after the tech rally
US stock futures stumbled into pre-market trading on Tuesday after a rally in the tech sector led stocks higher to start the week. Investors are watching the war in Ukraine and preparing for the possibility of new sanctions against Russia.
Contracts on the S&P 500, Dow Jones Industrial and Nasdaq Composite each fell around 0.2% before opening after all three benchmarks closed green on Monday. The Nasdaq, which gained 1.9% in the main session, was supported by a 27% rise in Twitter (TWTR) after Tesla (TSLA) CEO Elon Musk revealed he bought a 9% stake. , 2% in the social media company.
Musk is “talking to his money by saying that Twitter is an underrated platform,” MKM Partners’ Rohit Kulkarni told Yahoo Finance Live. “He sees there are things they can do to improve serve and is definitely hinting at a more active role.”
Dan Ives, Wedbush Securities analyst and Tesla bull, also told Yahoo Finance that he expects Musk to have an active stake in the social media platform in the coming weeks or months and that his recent stock purchase was “just the starter”.
Separately, Musk’s company, electric vehicle giant Tesla, contributed to the gains that prompted the take-off for the technology during Monday’s trading session. Shares of the electric vehicle maker were up nearly 6% after reporting vehicle delivery figures this weekend which were higher than the same period last year.
Recessionary nervousness was at bay Monday after a closely monitored part of the Treasury yield curve reversed last week and scared investors about the possibility of an imminent economic contraction. The phenomenon has a history of predicting a recession, with each of the last eight slowdowns dating back to 1969 preceded by a reversal of the yield curve. As of Monday morning, the yield on the benchmark 10-year bond has remained below that of the shorter-term 2-year bond.
However, concerns of an economic downturn were not completely off the table for strategists.
Nomura’s US chief economist Robert Dent told Yahoo Finance Live he sees the potential for a “mild recession”
“We think the cumulative risk of a recession between now and the end of 2024 is around 35% to 40%,” he said. “A lot of that comes from just what we think will be this very aggressive response from the Fed to actually keep inflation in check and make sure the job market cools.”
Uncertainty about the crisis in Eastern Europe also continues to be an obstacle for investors. JPMorgan CEO Jamie Dimon warned in his widely read letter to shareholders that the war in Ukraine is likely to significantly slow the United States and the global economy. In the United States in particular, the bank estimates that the US economy will grow by about 2.5%, a downgrade from the institution’s initial GDP forecast of 3%, with greater cuts than the forecasts on the economic outlook for Russia and the United States. ‘Europe.
“We don’t know what its outcome will be in the end, but hostilities in Ukraine and sanctions on Russia are already having a substantial economic impact,” said Dimon, adding that “many more” sanctions could be imposed on Russia and further stimulate the unpredictability.
The European Union addressed apparent war crimes in Ukraine on Monday, indicating in a statement that officials would “work on further sanctions against Russia” for the country’s targeted attacks on civilians. Some prominent European officials, including the German defense minister, have said they would support Russia’s ban on natural gas – a move previously ruled out by sanctions as Russia supplies around 40 percent of Europe’s gas energy.
7:10 am ET: Stock futures slide, oil rises after Monday’s tech rally
Here are the main moves in futures trading before the opening on Tuesday:
S&P 500 futures (ES = F): -10.50 points (-0.23%) at 4,567.25
Dow futures (YM = F): -83.00 points (-0.24%) to 34,746.00
Nasdaq Future (QN = F): -37.75 points (-0.25%) at 15,126.50
raw (CL = F): + $ 1.28 (+ 1.24%) to $ 104.56 per barrel
Gold (GC = F): from $ -1.70 (-0.09%) to $ 1,932.30 per ounce
Ten-year treasure (^ TNX): 0.00 bps to make 2.4120%
6:12 PM ET Monday: Futures open little changed after stocks close higher
Here’s where the markets traded ahead of the Monday night session:
S&P 500 futures (ES = F): -2.25 points (-0.05%) to 4,575.75
Dow futures (YM = F): -14.00 points (-0.04%) to 34,815.00
Nasdaq Future (QN = F): -9.25 points (-0.06%) at 15,155.00
raw (CL = F): + $ 0.43 (+ 0.42%) to $ 103.71 per barrel
Gold (GC = F): + $ 3.30 (+ 0.01%) to $ 1,937.30 per ounce
Ten-year treasure (^ TNX): +3.5 bps for a yield of 2.4120%
Alexandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alexandraandnyc
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