US stock futures rose Monday after a brutal day for markets in earlier trading, fueled by renewed investor fears that a growing number of Omicron cases could derail the economic recovery and exacerbate inflationary pressures.
Contracts on the Dow, S&P and Nasdaq turned green and crept up during the day session. Futures for the Dow Industrial Average rose 102 points en route to overnight training, while the S&P and Nasdaq also reversed course after dropping nearly 2% each for all three indices at close.
“We’re seeing a broad sell-off of risky assets, but ultimately, if we think about the longer time frame, I’m not sure it will meaningfully change our investment outlook for 2022,” said Meera Pandit. , a global market strategist at JPMorgan Asset Management told Yahoo Finance Live.
“In terms of the virus, in past peaks and previous variants, we’ve finally seen that market sell-offs are limited to a period of time, so we expect that as we get better and better at dealing with some of these challenges from an economic and market perspective , things are likely to settle down despite some of the public health challenges ahead.”
With fears of the virus leading to more restrictions and cancellations, concerns about the spread of Omicron are weighing on traders who are still reeling from the Federal Reserve’s aggressive shift last week to withdraw monetary support more quickly and reduce monetary gains. forecasts for rate hikes next year.
To add to their plate, investors are also handling an unexpected blow to President Joe Biden’s economic agenda after Senator Joe Manchin (D., W. Va.) overturned the government’s long-deliberated Build Back Better Act, citing concerns about inflation, the national debt and ongoing pandemic in an interview on Fox News Sunday.
The news caused shares of solar and electric vehicles to plummet in a sell-off that took Tesla (TSLA) below $900 for the first time since October. The stock closed 3.5% lower at $899.94.
“When we think about Build Back Better, we’re probably going to face a fiscal cliff last year, with less fiscal spending than we’ve seen in the past two years,” Pandit also told Yahoo Finance Live. “But the Build Back Better account was expected to be phased in over a number of years, so while it will be a bit of a headwind for growth, I think it’s mostly indicative of sentiment at the moment.”
Even with a short trading week with a short holiday, investors are gearing up for a packed economic release schedule. The Conference Board will release its latest consumer confidence index on Wednesday, which is expected to show only modest gains for the month of December.
The Bureau of Economic Analysis will also release new printouts Thursday on personal consumption expenditure (PCE), an important measure of price changes in the economy. Consensus data collected by Bloomberg showed PCE is expected to rise 0.6% monthly in November.
The new inflation data will be the focus of investors’ attention in the coming days.
“We have some headwinds coming our way now,” Ted Oakley, managing partner of Oxbow Advisors, told Yahoo Finance Live. He said investors are pricing in “peak hawkishness” from the Federal Reserve and inflation.
“Finally, you just had such a speculative market that it’s easy to sell some,” he added.
6pm Monday ET: Futures contracts sink
These were the main moves in the markets in late trading on TK:
S&P 500 future (ES=F): 13.75 points (+0.30%), to 4,572.25
Dow Futures (YM=F): 102 points (+0.29%), to 34,915.00
Nasdaq Futures (NQ=F): 69.75 points (+0.45%) to 15.691.00
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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