Tuesday January 25, 2002

// January 25th, 2022 // Daily News

S&P 500 futures slide by more than 1% as market’s wild ride continues

U.S. stock futures fell Tuesday as market volatility continued after the major indexes on Monday notched one of the biggest comebacks in history.

Futures contracts tied to the Dow Jones Industrial Average lost about 280 points, or 0.8%. S&P 500 futures dropped 1.6%, while Nasdaq 100 futures fell 2.2%.

The Dow on Monday rallied from a more than 1,100-point loss to close up higher and snap a six-day losing streak. The Nasdaq Composite reversed a 4.9% decline from earlier in the day to finish positive — its biggest comeback since 2008. The S&P 500 also rebounded from major losses to close up.

History shows a sharp intraday rebound for the Nasdaq Composite does not typically signal the end of the sell-off, but rather marks volatility seen at the start of a down period, according to Bespoke Investment Group analysis.

The yield on the benchmark 10-year Treasury note rose Tuesday, pressuring Nasdaq 100 futures and technology shares in the premarket.

Despite Monday’s comeback, the S&P 500 is still down 7.5% in January, its worst month since March 2020 at the onset of the pandemic.

The 10-year Treasury yield has climbed this year as the Federal Reserve tightens its monetary policy and prepares to hike interest rates. Investors have rotated out of high-growth areas of the market in favor of safer bets. The Nasdaq Composite is in correction territory, down 14% from its intraday record.

“Downside risks from monetary tightening are higher vs history. The pain has so far been localized to high valuation stocks, but signs of a broader risk-off are brewing,” Barclays’ Maneesh Deshpande said in a note Tuesday.

Investors are eyeing the Fed’s two-day policy meeting beginning Tuesday for updates on when the central bank will raise interest rates and by how much. Market participants expect the Fed to signal a rate hike as soon as March and more policy tightening on the table to address high inflation.