Stock futures rise more than 1% after S&P 500, Dow closes at lowest level since 2020

It's increasingly becoming a stock-picking market, says Kayne Anderson Rudnik's Julie Biel

After the start of the week, stock futures were higher on Tuesday morning, extending a sharp drop in September.

S&P 500 futures rose 1.42% and Nasdaq 100 futures rose 1.6%. Shares tied to the Dow Jones Industrial Average rose 379 points, or 1.27%.

The futures move came after a five-day losing streak in stocks, with the S&P 500 closing at its lowest level for 2022 on Monday. The Dow Jones fell more than 300 points on Monday, entering a bear market after falling more than 20% to its all-time high.

Technical indicators show that the sell-off is historic. The S&P 500’s 10-day advance decline line has hit a new all-time low, according to Bespoke Investment Group, meaning market breadth is at its lowest level in at least 32 years.

There appeared to be several catalysts for the latest sell-off, including an aggressive Federal Reserve and soaring interest rates, which in turn roiled currency markets. Sterling fell to a record low against the dollar on Monday, rattling investors on both sides of the Atlantic.

“U.S. investors normally don’t pay too much attention to things like this, especially lately. So that means to me that fear now grabs investors more than it used to. And that in turn leads to the fact that we’re really in a The moment of surrender at the bottom,” said Max Gokhman, CIO of AlphaTrAI.

On Tuesday, investors will get several new economic data, including September consumer confidence, August durable goods orders and July home prices. Wall Street is increasingly concerned that the Fed’s six-month inflation battle will push the economy into recession.

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