Traders work on the floor of the New York Stock Exchange.
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Stock futures traded sharply higher Tuesday as investors returned from a three-day weekend feeling a bit more optimistic after last week’s steep selloff.
Contracts linked to the Dow Jones Industrial Average rose 450 points, or 1.5%, to 30,319, S&P 500 futures rose 1.7% and Nasdaq futures gained 1.7%. Apple (ticker: AAPL) gained 1.7% in premarket trading, Microsoft (MSFT) rose 1.4% and Amazon.com (AMZN) was up 1.7%.
The yield on the 10-year Treasury rose to 3.248% from 3.238% on Friday.
Stocks closed mostly higher on Friday after a brutal week. The Dow ended the week with a drop of 4.8% — its worst one-week percentage decline since Oct. 30, 2020. The blue-chip index has fallen for 11 of the past 12 weeks. The S&P 500 dropped 5.8% last week, its worst since late March 2020. The tech-heavy Nasdaq declined 4.8% last week and has fallen 10 of the past 11 weeks.
Markets in the U.S. were closed Monday for the observance of Juneteenth National Independence Day.
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Lifting sentiment Tuesday were comments from President Joe Biden, who said a U.S. recession wasn’t “inevitable.” The president’s comments were made Monday following a talk he had with former Treasury Secretary Larry Summers, who feels there is a recession ahead.
“No, I don’t think it is,” Biden said about asked whether the U.S. was headed for a recession. “I was talking to Larry Summers this morning and there’s nothing inevitable about a recession.” Treasury Secretary Janet Yellen also said the same thing over the weekend despite U.S. consumers being hit with rising borrowing costs, high inflation and surging energy prices.
Appearances before Congress from Federal Reserve Chairman Jerome Powell will be closely watched by Wall Street this week. The Fed has been hiking rates in an effort to cool inflation that is running at 40-year highs. Some investors fear the Fed’s aggressive policy tightening will lead to a recession.
The central bank raised its benchmark interest rate by 0.75 percentage point last week and is expected to do so again at its next meeting in July.
St. Louis Fed President James Bullard played down fears of a severe recession, saying Monday the U.S. economy should continue to grow in the coming several months. But he warned that high inflation posed a serious risk to the U.S. economy.
Here are some stocks on the move Tuesday:
Twitter (TWTR) rose 1.2% to $38.22 in premarket trading. Elon Musk told an audience at the Qatar Economic Forum in Doha that he would be “driving the product” at Twitter reiterated he doesn’t necessarily want to serve as CEO of Twitter after he completes the acquisition of the social media company.
Tesla (TSLA) was rising 3.1% after Musk told Bloomberg that job cuts at the electric-vehicle company would result in a reduction of as much as about 3.5% of Tesla ’s total headcount.
Kellogg (K) surged 8% after the cereal and snack giant announced plans to split into three independent companies.
Mondelez (MDLZ) rose slightly after announcing it would acquire energy bar maker Clif Bar for about $2.9 billion.
Write to Joe Woelfel at [email protected]
