From the Wall Street Journal’s “Stock Futures Fall in Wake of Turbulence on Wall Street” posted early Tuesday:
U.S. stock futures slumped, putting markets on course for another day of bumpy trading, as investors awaited the start of the Federal Reserve’s policy meeting and a docket of major earnings.
S&P 500 futures fell 1.6%, while futures tied to the technology-heavy Nasdaq-100 slumped over 2%. Futures linked to the blue-chip Dow Jones Industrial Average dropped 1%.
Market volatility has spiked in recent sessions, amid investor anxiety about how rapidly the Federal Reserve will act to combat inflation by raising interest rates and shrinking its balance sheet. Meantime, the first batches of earnings have failed to deliver the bumper beats investors became accustomed to last year, while geopolitical tensions surrounding Ukraine and Russia have weighed on sentiment.
Markets whipsawed Monday, with the Nasdaq Composite declining as much as 4.9% before rallying to close 0.6% higher. The S&P 500 and Dow Jones Industrial Average staged similar comebacks.
The turbulent trading “showed that investors are facing a dilemma,” said Tai Hui, Asia chief market strategist at J.P. Morgan Asset Management. Investors, who are expecting up to four interest rate increases this year, are anxious about what that could do to pricier stocks, but the economic outlook remains decent and they are aware that few assets offer equities’ long-term return prospects, he said.
Charts: Yahoo!Finance sees a bearish fast stochastic pattern. Max pain stays at $170 with a call mountain at $170.