U.S. stock futures struggling for traction after Apple news revives recession fears

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US stock futures were a touch firmer but struggling for traction on Tuesday as investor fears of an economic downturn – following reports of slowing spending at Apple – continued to constrain risk appetite.

How are stock-index futures trading
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On Monday, the Dow Jones Industrial Average DJIA,
-0.69%
fell 216 points, or 0.69%, to 31073, the S&P 500 SPX,
-0.84%
declined 32 points, or 0.84%, to 3831, and the Nasdaq Composite comp,
-0.81%
dropped 92 points, or 0.81%, to 11360. The S&P 500 has fallen six of the last seven sessions and has shed 19.6% year-to-date.

What’s driving markets
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Another equity bear market rally has been hobbled after a report, suggesting that Apple AAPL,
-2.06%
was slowing hiring and spending, revived concerns that higher borrowing costs and rampant inflation is damping corporate confidence while crimping growth.

The fears are reflected in the US bond market, too. As the Federal Reserve has tightened policy, investors have pushed 2-year yields TMUBMUSD02Y,
3.166%
above 10-year yields TMUBMUSD10Y,
2.986%,
an inversion that is deemed a harbinger of recession.

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The Apple news highlighted a dispiriting trend, noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank: “Elon Musk recently announced he would cut 10% of jobs in Tesla, because he has a bad feeling about the economy. Alphabet, Amazon, Meta, Snap and even Goldman announced they would need less people to work for them as businesses would slow.”

The reversal in Monday’s session left the S&P 500 below its 50-day moving average for the 60th consecutive day. That’s its longest such run since 2008 and suggests the market’s downtrend remains intact.

Underpinning sentiment, however, is a mostly positive second-quarter earnings season, where 57% of those companies to have reported so far have beaten earnings per share and revenue expectations, according to S&P Global Market Intelligence.

Pre-market trading suggests IBM IBM,
-1.28%
results were not well-received, however. The tech company beat expectations, but concerns about how a strong dollar may impact future earnings pushed the stock lower by 4.8% at $131.50.

Earnings coming on Tuesday include Lockheed Martin LMT,
-2.79%,
J&J JNJ,
-2.24%
and after the closing bell, Netflix NFLX,
+0.96%,

More housing data — building permits and housing starts, both for June — are set for release at 8.30 am Eastern.

How are other assets faring

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Credit: www.marketwatch.com /

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