U.S. stock index futures showed signs of recovery in Monday’s evening trading session after Wall Street suffered significant losses due to heightened fears of an economic downturn.
Some bargain buying, especially in the technology sector, helped stocks recover following a steep decline in valuations over recent weeks.
By 19:07 ET (23:07 GMT), S&P 500 Futures increased by 0.9% to 5,263.75 points, Nasdaq 100 Futures climbed 1.2% to 18,224.25 points, and Dow Jones Futures rose 0.5% to 39,053.0 points.
Economic Slowdown Fears Drive Stock Market to New Lows
Recent disappointing reports on purchasing managers index and labor market performance have fueled concerns about a significant slowdown in economic growth. As a result, Wall Street has dropped from its near-record highs over the past two weeks.
On Monday, the S&P 500 fell by 3% to 5,186.33 points, while the NASDAQ Composite dropped 3.4% to 16,208.38 points, with both indexes reaching three-month lows. The Dow Jones Industrial Average decreased by 2.6% to hit a two-month low of 38,703.27 points.
Weak economic data has led to fears that the Federal Reserve’s high-interest rates have been maintained for too long, and that potential cuts may not be enough to facilitate a smooth economic recovery.
Nonetheless, market expectations have increased for a 50 basis point rate cut in September, with at least 100 bps in rate reductions anticipated this year, according to the CME FedWatch tool.
Technology Sector Sees Mixed Performance
Wall Street’s losses were primarily driven by continued selling in technology stocks due to a mix of factors.
Apple Inc. experienced significant losses on Monday after Berkshire Hathaway Inc. announced it had reduced its stake in the company. However, Apple shares rose slightly in after-hours trading.
NVIDIA Corporation saw a 2.4% rise following a 6% decline earlier due to a report of a design flaw delaying the release of its latest artificial intelligence chip.
Alphabet Inc. saw a modest increase after a 4.5% drop, following a court ruling that the company had violated antitrust laws with its search engine practices.
Upcoming Q2 Earnings Reports
Several major companies are scheduled to release earnings reports in the coming days. Industrial leader Caterpillar Inc. and ride-sharing company Uber Technologies Inc. are set to report on Tuesday.
Super Micro Computer Inc. will also report on Tuesday, potentially providing insights into demand from the artificial intelligence sector.
Media giants Walt Disney Company and Warner Bros Discovery Inc. are expected to release their earnings on Wednesday.
