Stock futures rose early Wednesday morning after Wall Street got off to a sour start to 2023.
Futures linked to the Dow Jones Industrial Average rose 0.04%, or 14 points, while S&P 500 and Nasdaq 100 futures were flat, up 0.08% and 0.2%, respectively.
The overnight moves followed a down session for stocks as rising interest rate concerns, high inflation and recession fears dashed hopes that Wall Street could start the new year on a positive note.
During regular trading on Tuesday, the Nasdaq lost 0.76%, while the Dow Jones Industrial Average and S&P 500 declined 0.03% and 0.4%, respectively. Shares in Tesla plunged more than 12% on lower-than-expected deliveries, while Apple fell 3.7% on reports of production cuts.
Six of the 11 major S&P sectors closed lower, prompting downward movement in energy. The sector was the best performer in 2022 as oil prices boosted energy stocks. Communication services rose about 1.4%, led by Meta Platforms and Walt Disney.
“US stocks have failed to hold on to previous gains as tightening policies and recession fears remained a top concern for investors,” wrote Ed Moya, Oanda’s senior market analyst, in a note to clients on Tuesday. “Discount buying sparked another bearish rally that didn’t last long at all.”
Many investors have hoped the market would recover after the major averages posted their worst year since 2008. The Federal Reserve and its tightening plan are coupled with fears of a looming recession looming over the markets in the near term.
Investors will get more insight into the thoughts of Fed members Wednesday afternoon when minutes from the central bank’s most recent meeting are released. Earlier in the day, the Job Openings and Labor Turnover Survey or JOLTS and ISM manufacturing data is released.
Friday’s December jobs report will also be closely watched as it will be the last job read before the Fed’s February meeting.
“It’s too early to call for a Fed pivot this year and that should make this environment difficult for equities,” Moya said.
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