Stocks Open Higher After S&P 500’s Worst Week in Two Years

US stock futures climbed, offering investors a repossession from a recent stretch of whipsaw trading that had sent stocks and cryptocurrencies falling.

Futures for the S&P 500 gained 1.6% on Tuesday, while those for the Dow Jones Industrial Average added 1.4%. Contracts for the Nasdaq-100 jumped 1.6%. The US stock market was closed Monday for the Juneteenth federal holiday.

Bitcoin rose alongside other cryptocurrencies, continuing to claw back recent losses after a bruising weekend. Bitcoin recently traded at about $21,028, up 2.9% from its 5 pm ET value Monday, and about 19% higher from a recent low of $17,601.58 reached Saturday, according to CoinDesk data.

Investors’ appetite for riskier assets on Tuesday follows a tumultuous week in the markets, sparked by the Federal Reserve’s approval of a 0.75-percentage-point interest-rate increase, the largest since 1994. That sent investors scrambling to unload riskier assets amid growing fears that central bankers will plunge the US economy into a recession. The S&P 500 benchmark finished the week 5.8% lower, its largest one-week decline in more than two years.

Government leaders and officials in recent days have tried to assuage an increasingly jittery nation that an economic slowdown isn’t guaranteed as central bankers work to tame decades-high inflation. President Biden on Monday said he spoke with Lawrence Summers, a former Treasury secretary, and reiterated that he doesn’t see a recession as inevitable. Federal Reserve Bank of St. Louis President James Bullard also said the economy appears on track for more expansion this year.

Still, many market watchers are bracing for an economic downturn. In a note Monday, a team of Goldman Sachs economists increased their outlook for a US recession, citing concerns that the Fed will feel compelled to respond forcefully to inflation data, even if economic activity slows. The team now sees a 30% probability of entering a recession over the next year, versus 15% previously, and a 25% probability of entering a recession in the second year if one is avoided in the first.

Investors and analysts say they expect more pain ahead in the markets, though some are still willing to wade in and buy stocks at a discount after a selloff that has dragged the S&P 500 down 23% this year. Many pointed to Tuesday’s recovery as a bounce off last week’s drawdown.

“This still feels like a bit of a dead-cat bounce,” said Viraj Patel, global macro strategist at Vanda Research, referring to a term used to describe a brief market rally. He said investors’ willingness last week to dump shares of winning sectors this year, including energy and utilities stocks, might be a signal that this year’s drawdown has entered into its latter stages. Still, he said, he believes the selloff “still has legs to go.”

Tuesday’s bullish mood came alongside a selloff in US government bonds, sending the yield on 10-year US Treasury note higher. The yield on the benchmark note traded at 3.281%, up from 3.238% Friday. Yields and bond prices move in opposite directions.

In premarket trading in New York, gains were spread across many sectors, with technology shares, travel companies and banks trading higher. Cruise line Royal Caribbean Group rose 2.7%, while American Airlines Group climbed 2.3%, boosted by expectations for what is expected to be a busy travel season.

Growth stocks, which have been beaten down this year, notched gains before the opening bell. Data and software company Palantir Technologies jumped 3.8%, chip maker Nvidia gained 3.3% and Tesla added 3%. Megacap technology companies and Netflix each gained 1.7% and 1.4%, respectively.

Kellogg shares jumped 6.2% premarket after the company said it plans to split itself into three publicly traded businesses.

Investors this week will be monitoring Fed Chairman Jerome Powell’s testimony before Congress for any further indication about the path of interest rates this year. He is expected to test Wednesday and Thursday. Data on housing and consumer sentiment are also due.

For now, Seema Shah, chief strategist at Principal Global Investors, said investors may see value in companies whose shares have been badly beaten down this year. However, she said, she expects the market to fall further once investors begin to see consistent declines in earnings growth.

“I think what you could see is a [modest] rally through the summer…and as you get into the autumn months and the next earnings season, I think a lot of the economic data is going to start to turn and earnings growth is going to start to turn,” she said. Still, she noted, even now, “sentiment is deteriorating very rapidly.”

Other safe-haven assets retreated Tuesday amid improved investor sentiment. The WSJ Dollar Index, which measures the greenback against a basket of 16 currencies, slipped 0.1%. Gold prices fell 0.1% to $1,838.90 a troy ounce.

Traders worked on the floor of the New York Stock Exchange on Thursday.


Spencer Platt/Getty Images

In commodities, oil prices rose. Brent crude, the international benchmark, rose for a second day, climbing 1.5% to $115.80 a barrel. Last week, oil prices fell amid concerns that a possible recession would weigh on energy demand.

Overseas, the pan-continental Stoxx Europe 600 pink 0.5%. In Asia, trading was mixed. Hong Kong’s Hang Seng rose 1.9% and Japan’s Nikkei 225 gained 1.8%, while China’s Shanghai Composite lost 0.3%.

Write to Caitlin McCabe at

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