U.S. stock futures ticked higher early Wednesday, attempting a rebound after a sharp decline in Big Tech stocks and renewed concerns about the Federal Reserve’s rate-cut path spurred a sell-off on Wall Street.
S&P 500 futures rose by 0.23%, while Nasdaq 100 futures gained 0.22%. Futures tied to the Dow Jones Industrial Average advanced 81 points, or approximately 0.19%.
The rally in futures came after stocks faced pressure during Tuesday’s regular session. All three major averages finished in the red, weighed down by fresh data from the U.S. services industry. The Institute for Supply Management’s (ISM) services index for December revealed an acceleration in activity within the sector. However, the report also showed a rise in prices, reigniting fears of persistent inflation and raising questions about the future trajectory of interest rate cuts by the Federal Reserve. According to the CME Group’s FedWatch tool, current data indicates a 95% likelihood of no interest rate reductions during the central bank’s upcoming meeting this month.
On Tuesday, the Nasdaq Composite led the declines, falling nearly 2%. The broad-market S&P 500 and the blue-chip Dow Jones Industrial Average also dropped by more than 1% and around 0.4%, respectively.
Technology stocks were hit particularly hard, with Nvidia leading the losses in the sector, shedding more than 6%. Tesla and Meta Platforms saw sharp declines of 4% and nearly 2%, respectively.
The ISM data also contributed to a spike in Treasury yields, with the benchmark 10-year note hitting an intraday high of 4.699%. This marked the highest level since April.
Despite the volatility, Ayako Yoshioka, portfolio consulting director at Wealth Enhancement Group, remains optimistic about the market’s long-term prospects for 2025. Speaking on CNBC’s Closing Bell, Yoshioka acknowledged the potential for increased market turbulence due to various factors such as growth concerns, inflation, and policy changes. However, she believes these challenges will create long-term buying opportunities.
“We have so many different crosscurrents, whether it’s on the growth side, the inflation side, or policy changes,” Yoshioka said. “Those are going to probably rattle markets at times, but I think there are going to be overall just buying opportunities in the long term.”
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