After a wildly volatile session in which the Dow erased a more than 1,100 point loss to finish the day in positive territory, U.S. stock index futures fell in early trading Tuesday.
Futures contracts linked to the Dow Jones Industrial Average were down 36 points, or about 0.1 percent, after falling as much as 380 points earlier. S&P 500 futures fell 26 points, or 0.6 percent, while Nasdaq 100 futures fell around 150 points, or 1 percent, after falling more than 2.2 percent earlier.
The Dow gained 99 points, or 0.3 percent, during regular trading Monday, snapping a six-day losing streak. The 30-stock index was down 3.25 percent at the day’s lows. After losing nearly 4% earlier in the day, the S&P 500 gained 0.28 percent for its first positive session in five. The benchmark index briefly entered correction territory, falling 10% from its Jan. 3 record close.
The Nasdaq Composite increased by 0.6 percent, reversing a 4.9 percent drop earlier in the day. The rally was the first time the tech-heavy index overcame a 4% loss to finish higher since 2008. Finally, Bell stated that volatility is here to stay until the Fed raises interest rates.
Stock Index in Pandemic Period
Monday’s volatility comes on the heels of the S&P 500’s worst week since the pandemic began in March 2020. Fearful of rising interest rates, investors have shifted away from high-growth market sectors in favor of safer bets. On Monday, the benchmark 10-year Treasury note yield was 1.769 percent.
Despite Monday’s rally, the S&P 500 is still down 7.5 percent in January, its worst month since March 2020, when the pandemic began.
Markets have been roiled by several factors, the most prominent of which is the Federal Reserve’s expectation to begin raising interest rates soon to combat inflation, as well as geopolitical tensions between Russia and Ukraine. The economic impact of omicron has also been a source of concern. However, signs of slowing the COVID variant spread have allayed those fears.
The Nasdaq Composite, heavily weighted in technology, has been particularly hard hit and fell into correction territory last week. This year, the index is down 11.4 percent, trailing the S&P and Dow, down 7.5 percent and 5.4 percent, respectively.