Stock futures rebounded slightly following a losing day on Wall Street with rising oil prices and bond yields in focus. Those two factors eased a bit Tuesday morning, boosting sentiment.
Dow Jones Industrial Average futures added 61 points. S&P 500 futures gained 0.4% and Nasdaq 100 futures added 0.5%. Futures were lower for most of the overnight session.
The Dow finished nearly 400 points lower on Monday, while the S&P 500 slid close to 1%. Technology stocks felt the brunt of Monday’s declines, pushing the Nasdaq Composite down about 1.2%.
Some tech shares like Nvidia and Super Micro Computer were higher Tuesday. Nvidia added about 1.6% and Super Micro gained 3.3%. Wells Fargo gained 1% in premarket following an analyst upgrade.
Rising bond yields put downward pressure on the market to start the week. Notably, the 10-year Treasury yield climbed above 4% Monday to touch its highest levels since early August.
But the 10-year Treasury yield was stable Tuesday morning, hovering around 4%.
West Texas Intermediate oil futures advanced above $77 per barrel to start the week, but was back down about 2% early Tuesday as traders monitored Israel’s expected retaliation to Iran missile attacks and U.S. efforts to stave off an even wider war in the region.
Stocks have been volatile in the new trading month as investors have grown increasingly fearful of escalating conflict in the Middle East. The S&P 500 is off by a little more than 1.1% in October following a 2% gain in September.
The market rallied a bit to end last week after a blockbuster jobs report. The Dow even managed to notch a new all-time closing high on Friday. But that enthusiasm faded this week as investors reasoned that now the Federal Reserve may not be as aggressive with future rate cuts with the labor market still strong.
“Initially, the market rallied on that really good economic news,” said Larry Tentarelli, chief technical strategist of the Blue Chip Daily Trend Report, of the labor market data. “I think what you’ve got now is the market adjusting to higher bond yields.”
Investors will watch Tuesday for economic data on small businesses and the trade deficit. They’ll also monitor speaking engagements scheduled throughout the day for central bank leaders including Boston Federal Reserve President Susan Collins and Atlanta Fed President Raphael Bostic. A key inflation reading — September’s Consumer Price Index — looms on Thursday.
Pepsi shares slump 1% after company cuts revenue forecast
PepsiCo shares lost more than 1% before the bell after the food and beverage giant cut its full-year guidance.
The company said it now expects low-single digit organic revenue growth gains, down from previous expectations for 4% growth.
Earnings for the recent quarter topped estimates by 2 cents per share, but revenue fell short of the $23.76 billion expected by analysts polled by LSEG.
— Samantha Subin, Amelia Lucas
Wells Fargo, Humana higher after upgrades
Wells Fargo and Humana were among the early market movers after the shares were upgraded on Wall Street.
Humana was upgraded to outperform by Bernstein, which said a recent decline was a good entry point.
Wells Fargo was upgraded to outperform by Wolfe Research, which said the bank’s valuation was attractive.
See CNBC Pro’s morning analyst blog for more info on the calls.
-John Melloy
Mainland China markets rally, but Hong Kong plunges amid broader Asia downturn
Mainland Chinese markets rallied as investors returned to trading after the Golden Week holiday, with the CSI 300 skyrocketing over 10% at the open.
But the rally later fizzled out after a briefing from the country’s National Development and Reform Commission provided few details on further stimulus.
The CSI pared gains to a 5.93% rise at the end of the session, while Hong Kong’s Hang Seng index lost 8.08% as of its final hour of trading.
Other Asia-Pacific markets mostly fell on Tuesday, with investors digesting August pay and spending data out from Japan.
— Lim Hui Jie
European markets open lower
European markets opened lower Tuesday as regional sentiment sours further after a shaky start to the week.
The pan-European Stoxx 600 was down 0.81% in early deals, with all sectors and major bourses trading in the red. Mining stocks shed 3.65% while household goods fell 2.1%.
— Karen Gilchrist
October is a good time to use ‘healthy’ pullbacks to add to positions, Piper Sandler says
October is traditionally a volatile month, but Piper Sandler believes that investors can use the market’s actions to their advantage.
“Historically, October tends to be a ‘backing and filling’ month as investors react to the Q3 earnings season results. We would continue to use ‘healthy’ pullbacks to add to positions, especially among leading SMID-caps in the Industrial, Financial, and Technology sectors,” the investment firm wrote in a Monday note.
In the note, Piper Sandler stood by its year-end S&P 500 target of 5,800. This implies that the broad market index could rise less than 1%.
— Lisa Kailai Han
Penn Entertainment shares advance after company lessens EBITDA loss expectations
Penn Entertainment shares rose more than 1% after the company said one of its profitability measures should show a smaller loss than originally expected.
In a regulatory filling, the sports betting company to expect adjusted EBITDA — or earnings before interest, taxes, depreciation and amortization — for its interactive segment to come in at a loss of between $90 million and $100 million for the third quarter. That’s an improvement from the previously set range for loss of $115 million to $135 million.
Penn Entertainment shares have tumbled more than 28% this year.
— Alex Harring
Stock futures inch higher
Stock futures were slightly up shortly after 6 p.m. ET.
Dow and S&P 500 futures rose around 0.1% each. Nasdaq 100 futures added 0.2%.
— Alex Harring
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