Traders work on the floor at the New York Stock Exchange on Feb. 7, 2024.
Brendan Mcdermid | Reuters
U.S. stock futures nudged higher Wednesday morning after the Dow Jones Industrial Average posted its biggest decline since March 2023.
Futures tied to the Dow gained 43 points, or 0.11%. S&P 500 futures inched up 0.2%, and Nasdaq 100 futures added 0.32%.
In after-hours trading, Lyft shares jumped more than 16% after the ride-hailing company posted better-than-expected earnings in the fourth quarter. Airbnb slipped more than 4% even as the company beat on revenue expectations in its latest quarter.
During Tuesday’s regular session, the 30-stock Dow shed 1.35% for its worst day since March 2023. The S&P 500 lost 1.37%, and the Nasdaq Composite slumped 1.8%. A hotter-than-anticipated inflation reading incited the sell-off as traders fretted that the Federal Reserve may not cut interest rates as early as they had hoped.
The consumer price index gained 0.3% in January on a monthly basis and rose 3.1% year over year. Meanwhile, economists polled by Dow Jones were forecasting a 0.2% month-over-month increase and 2.9% from the prior year.
Although January’s CPI report likely pushes the likelihood of a Fed rate cut to the second half of 2024 — versus investors’ initial expectations of rate cuts as early as March — the market rally isn’t over, according to U.S. Bank Wealth Management chief equity strategist Terry Sandven.
Tuesday’s pullback “allows valuations to come a little bit more in line with fundamentals. The reset gives investors oriented toward reasonable valuations an opportunity to perhaps get into the market,” he said.
“But importantly, with inflation, interest rates and earnings still being supportive of higher equity prices, we do not believe this is the beginning of the end, with a prolonged downturn in front of us,” Sandven added.
On Wednesday, Wall Street will be listening for comments from Chicago Fed President Austan Goolsbee.
Several big names are posting earnings, with Generac and Kraft Heinz reporting on Wednesday morning. Cisco Systems and Occidental Petroleum will issue results after the close.
Source Agencies
