Stock futures flat after S&P 500 slides for 5 straight days

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, Monday, Jan. 3, 2022.

Michael Nagel | Bloomberg | Getty Images

After a rebound on Wall Street, stock futures were steady in overnight trade on Tuesday as investors bought the dip after a five-day sell-off in the S&P 500.

Dow Jones Industrial Average futures were little changed. S&P 500 futures and Nasdaq 100 futures were also flat.

Markets rallied overnight, with the tech-heavy Nasdaq Composite rising more than 1% for the second day in a row. The S&P 500 rose 0.9% on Tuesday, snapping a five-day losing streak, while the blue-chip Dow gained 180 points.

“Anxieties related to the Fed’s recent hawkishness and the prospect of rate hikes appear to have calmed down a bit (at least for now), leaving investors looking for opportunities in the pockets of the biggest rate cuts in recent weeks,” Goldman Sachs managing director said in a note indicated in.

Tech stocks suffered a sharp sell-off in the new year after the Federal Reserve issued a faster-than-expected tightening plan. Many are betting that the market could see the first rate hike as early as March.

Bond yields, which start surging in 2022, steadied on Tuesday, with the 10-year U.S. Treasury yield slipping to 1.76% after breaking above 1.8% earlier this week.

Investors are awaiting key inflation data on Wednesday to assess the economic situation and the Fed’s next move.

Key metrics for measuring consumer prices expected to show Inflation at the consumer level soared in December, the largest price increase since the early 1980s. Economists expect the consumer price index to rise 0.4% in December and 7% from a year earlier, according to Dow Jones data.

“I’m not sure tomorrow’s inflation data will reassure investors that the CPI is on track for a multi-decade high above 7%,” said Craig Erlam, senior market analyst at Oanda. “Just when the stock market appears to be stabilizing, higher The reading could spook investors again.”

Chairman of the Federal Reserve Jerome Powell said Tuesday The economy is healthy enough to require tighter monetary policy, which could lead to higher interest rates, smaller asset purchases, and smaller balance sheets.

Meanwhile, the big banks are set to start their fourth-quarter earnings season on Friday. JPMorgan, Citigroup and Wells Fargo are scheduled to release quarterly results before the market opens.