Stock futures were higher in early trading on Tuesday following a steep sell-off on Wall Street a day earlier.
Dow Jones Industrial Average futures were up 9 points, or 0.03%. S&P 500 futures gained 0.25% and Nasdaq 100 futures climbed 0.7%.
Amazon shares rose 2% in the premarket after a Bernstein analyst upgraded the e-commerce giant to buy from hold, noting the recent pullback offers an attractive “entry point” for investors. Facebook, Apple and Microsoft were also higher by more than 1%.
Traders also digested remarks by Federal Reserve Chairman Jerome Powell, who reiterated the central bank will support the economy “for as long as ti takes.”
The market’s September sell-off intensified on Monday with the Dow Jones Industrial Average dropping 500 points, suffering its worst day since Sept. 8. The S&P 500 lost 1.2%, posting its first four-day losing streak since February. The Nasdaq Composite dipped just 0.1% after a late-day comeback rally.
Shares of Tesla dropped nearly 6% in overnight trading after CEO Elon Musk said in a tweet that the electric carmaker’s “Battery Day” event would not reach “serious high-volume production” until 2022, which disappointed investors and analysts.
Investors grew more anxious about the pandemic as the U.K. is reportedly considering another national lockdown as daily new infections rise. Meanwhile, prospects of further U.S. coronavirus fiscal stimulus became bleaker as lawmakers brace for a Supreme Court confirmation fight as President Donald Trump rushes to nominate a successor to Justice Ruth Bader Ginsburg, who died on Friday.
“Coronavirus concerns have resurfaced, worrying investors that a reversal in reopening progress could be near,” Lindsey Bell, chief investment strategist for Ally Invest, said in a note. “More and more uncertainty is arising as we get closer to the election but no closer to Congressional fiscal relief. But we’re still optimistic this dip will be bought sooner rather than later.”
The major averages are on pace for steep losses for September, a typically weak month for stocks. All three major averages had just suffered three straight weeks of losses. The Dow and the S&P 500 have fallen 4.5% and 6.3% this month, respectively, while the Nasdaq has dropped 8.4% as investors dumped high-flying tech giants.
“Market volatility is returning after months of steady advances in risk assets, and we see elevated volatility ahead of the November U.S. election,” Jean Boivin, head of BlackRock Investment Institute, said in a note. “In addition, negotiations of a new U.S. fiscal package are dragging on, the pandemic is still spreading in many countries, and U.S. China tensions are running high.”
On Tuesday, investors will monitor a hearing with U.S. Treasury Secretary Steven Mnuchin and Federal Reserve chair Jerome Powell in front of the House Financial Services Committee about pandemic responses.
On the earnings front, Nike will report its fiscal first-quarter results after the bell on Tuesday.
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