While increasing rates continue to weigh on market confidence, U.S. stock futures declined on Tuesday.
Futures for the Dow Jones Industrial Average fell 274 points, or 0.8%. NASDAQ 500 futures
also down 0.8%, and Nasdaq-100 futures fell about 1%. Due to the Presidents Day holiday, U.S. markets were closed on Monday.
As the home improvement store reported fourth-quarter revenue that was less than anticipated, Home Depot shares dropped 3.8% in premarket trading. The business also provided a somber prognosis. After releasing its most recent quarterly data, Walmart, another component of the Dow, also saw a more than 2% decline.
The 2-year rate increased to 4.669%, while the benchmark 10-year Treasury yield increased to 3.87%. These changes add to rates’ gains from the previous week, when they had risen as traders struggled with hotter-than-expected inflation data. The Federal Reserve may decide to keep rates higher for longer, which might push the economy into a recession, traders fear.
These worries restrained stock prices last week. The Dow dropped 0.1%, marking its third consecutive weekly loss. The S&P 500 fell for a second week in a row, dropping 0.3%. The tech-heavy Nasdaq Composite defied the general upward trend by increasing 0.6%.
According to Doug Peta, chief U.S. investment strategist at BCA Research, “we believe a recession is essentially inevitable, but we do not expect it will occur until sometime between the beginning and the middle of 2024.” A delay of this nature would allow stocks to rebound.
The Fed is expected to publish the minutes of its meeting from January 31 and February 1 on Wednesday. After the meeting, the central bank raised interest rates by 25 basis points.