Dow Jones futures rose solidly Friday morning, along with S&P 500 futures and Nasdaq futures, with a China interest-rate cut help.
The stock market rally had a volatile session Thursday, with the major indexes rebounding off lows and briefly turning higher before sinking back into the red. The Dow Jones undercut its recent lows, but the S&P 500 and Nasdaq composite have not.
The rebound comes after another downbeat day on Wall Street Thursday. The Dow and Nasdaq dipped 0.8% and 0.3%, respectively.
For the week, the Dow is off by 2.9% for what would be its first 8-week losing streak since 1932 as relentless selling has taken over Wall Street the last two months.
The S&P 500 fell 0.6% on Thursday and is now about 19% below a record closing high set in early January. This would be the first bear market — defined by many on Wall Street as a 20% drop from a high — since the pandemic decline of March 2020.
What’s driving markets?
The People’s Bank of China on Friday cut its rate on five-year loans, aimed at shoring up weak housing sales by cutting mortgage costs.
The country has been battling COVID outbreaks, with lockdowns in industrial hubs such as Shanghai blamed for weak factory and consumer activity data in April.
The S&P finished a step closer to bear-market territory on Thursday as the Russia-Ukraine war, a China slowdown, high inflation, and rising interest rates have sparked concerns over corporate profits and economic growth.
The US stock market finished a volatile session in negative territory on Thursday, 19 May 2022, in a continuing selloff driven by investor fears that the economy could be pitched into a recession amid a backdrop of rising prices and tightening monetary policy.
About 10 minutes into trading, the Dow Jones Industrial Average was down 0.7 percent at 31,276.04.
The broad-based S&P 500 slipped 0.2 percent to 3,914.36, while the tech-rich Nasdaq Composite Index climbed 0.3 percent to 11,447.84.
Major US indices dropped more than 3.5 percent on Wednesday, buffeted by worries about rising prices cutting into profit margins following disappointing results from retail giants Walmart and Target.
Investor sentiment remained brittle early Thursday, with equity buyers yet to show much-staying power.
Earnings reports from some of America’s biggest retailers in recent days have added to concern that the highest rate of inflation in four decades is catching up with U. S. consumers and pitching the economy toward a recession.
At the close of trade, the Dow Jones Industrial Average index fell 236.94 points, or 0.75%, to 31,253.13. The S&P500 index dropped 22.89 points, or 0.58%, to 3,900.79.
The Nasdaq and S&P 500 are on pace to fall for a seventh-straight week. Stocks have been under pressure this week as the latest quarterly figures from big-box retailers such as Walmart and Target raise concerns about a weakening consumer base and the ability of companies to deal with decades-high inflation. Target and Walmart are down sharply after posting their quarterly results this week.
The S&P consumer staples index fell 1.9% to hit a seven-month low and was the biggest decliner among the 11 major sectors as retail firms face the brunt of rising prices hurting the purchasing power of U.S. consumers.
“The consumer component is now starting to weaken, which bolsters the perspective that we are indeed heading into a recession,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.