Tuesday May 10th


S&P 500 futures bounce more than 1% as benchmark attempts comeback from 2022 low

U.S. stock index futures rose Tuesday morning, as the S&P 500 attempted to rebound after falling to its lowest level in more than a year. Dow Jones Industrial Average futures were last up 300 points, or 0.95%. S&P 500 and Nasdaq 100 futures climbed 1.2% and 1.9%, respectively. On the earnings front, shares of Peloton Interactive plummeted 27% before the bell after reporting a wider-than-expected loss in the recent quarter. AMC’s stock rose more than 6%, while Novavax dropped about 23% on the back of recent quarterly earnings. Tuesday’s moves came as Treasury yields eased from multiyear highs. The benchmark 10-year Treasury note yield, which hit its highest level since late 2018 on Monday, traded roughly 9 basis points lower, hitting below the 3% mark. On Monday, the S&P 500 dropped below the 4,000 level to a low of 3,975.48, marking the index’s weakest point since March 2021. The broad market index dropped 17% from its 52-week high as Wall Street struggled to recover from last week’s losses. The Dow dropped 1.99%, down more than 12% from 52-week highs. The S&P 500 fell 3.2% and the tech-heavy Nasdaq Composite lost 4.29%, off more than 27% from 52-week highs. “We still think a local bottom in equities is due in the next two weeks, but we’d await clearer signs of any even temporary stabilization in risk sentiment,” according to Citi’s Ebrahim Rahbari. Continued fears of rising inflation fueled Monday’s market declines, with tech stocks taking the brunt of the beating. Shares for Meta Platforms and Alphabet fell 3.7% and 2.8%, respectively, while shared of Tesla dropped more than 9%. “The sentiment has been very bearish for the last few months, if not the last few weeks for sure, and an inability to rally...tells you everything that you need to know about the current state of the market, meaning the bears are in control,” said Adam Sarhan, founder and CEO of 50 Park Investments. As the sell-off in equities continues some investors and analysts point to value stocks as a good hedge amid rising rates. “Despite our expectation of falling inflation and sustained growth, we believe investors should brace for further equity volatility ahead amid significant moves in key economic variables and bond markets,” wrote Mark Haefele of UBS. “We continue to favor areas of the market that should outperform in an environment of high inflation.” Coinbase, Roblox, RealReal and Allbirds are expected to report earnings after the bell. Most Asia-Pacific markets fell on Tuesday after heavy losses overnight on Wall Street that saw the tech-heavy Nasdaq Composite dropping more than 4%. Returning to trade after a holiday on Monday, Hong Kong’s Hang Seng index closed 1.84% lower on Tuesday at 19,633.69. In the broader markets, the Nikkei 225 in Japan fell 0.58% to close at 26,167.10 while the Topix index slipped 0.85% to 1,862.38. South Korea’s Kospi dropped 0.55% on the day to 2,596.56 while the S&P/ASX 200 in Australia fell 0.98%, closing at 7,051.20. Mainland Chinese stocks bucked the broader trend, and outperformed the broader region. The Shanghai Composite recovered from earlier losses to close 1.06% higher at 3,035.84 while the Shenzhen Component climbed 1.367% to 10,912.74. Oil prices tumbled more than 1% on Tuesday, extending the previous day’s steep declines as coronavirus lockdowns in top oil importer China, a strong dollar and growing recession risks fed worries about the outlook for global demand. Brent crude fell $1.83, or 1.7%, to $104.11 per barrel, after slipping to as low as $103.19. U.S. West Texas Intermediate crude fell $1.66, or 1.6%, to $101.43 a barrel after hitting an intraday low of $100.44. On Monday, both benchmarks posted their biggest daily percentage fall since March, dropping by 5% to 6% since March. Gold rose on Tuesday as the dollar in which it is priced steadied, prompting some investors to buy the metal ahead of U.S. inflation data that could impact the Federal Reserve’s monetary policy. Spot gold was up 0.5% at $1,862.48 per ounce by 11:33 ET, recovering slightly after falling as much as 1.7% on Monday on the dollar’s rally. U.S. gold futures rose 0.1% to $1,859.40 per ounce. The dollar was steady after touching a 20-year high on Monday, while benchmark 10-year U.S. Treasury yields were off 3-1/2-year peaks.