Stock futures opened slightly higher on Monday night after a tech-driven decline during the regular trading day, with a rotation away from growth stocks gaining momentum as inflation concerns eased.
Contracts on the Nasdaq rose after the index fell more than 2% on Monday afternoon. Shares in technology heavyweight Facebook (FB) stabilized in late trading after losing nearly 5% earlier, with hours of platform failure resulting in a Set of negative coverage another review of the social media giant.
Equity markets saw a number of concerns about the economic and inflationary backdrop, as well as the regulatory and political environment, in the final quarter of the year. Wall Street’s concern over the debt ceiling debates in Washington continued to grow Monday Some politicians already warned of a macroeconomic catastrophe in the middle of the month.
Investors are also still waiting for signals from individual companies on how they have dealt with supply chain challenges, rising labor costs and other pandemic-related stresses over the past few months, with earnings season set to start in earnest for the third quarter next week.
“The growth fear has likely occurred, and we’ve seen a better match of expectations for higher inflation and lower growth. But where the profits come into play … is that we will still have bags with really high price pressure that will make it harder to do business in select areas, “Francis Donald, Chief Economist at Manulife Global, said Yahoo Finance.
“We don’t necessarily need to watch the earnings season because of its broad impact – it’s important for the market, of course – but because we really need to be in a stock picking market where those who really understand these companies can see who’s going to do it from the supply chain problems and who will benefit from underlying fundamentals, which will improve through 2022, “she added.
Despite the plethora of headline risks to the market, some strategists have warned not to get too pessimistic.
“I don’t see this as the big, big pullback where we go 20% down and get into bearish territory,” Dr. Barton, Jr., director of Woodshaw Financial Group, Yahoo Finance Live said on Monday. “We are still inundated with so much money – it overcomes so much other bad news, and I think this is the only umbrella that will sustain this market for a while.”
Others offered a similar attitude.
“We think most of the dips are for sale here. I agree with the idea that the legs on which the bull case stands, which is accommodative politics, fiscal and monetary policy, plus just really strong business owners and one really strong consumer, are enough to outweigh the headline risks of a debt brake or political machinations, “said Ross Mayfield, strategy analyst at Baird Investment, Yahoo Finance Live said on Monday.
Monday, 6:10 p.m. ET: Stock futures stable on technology stocks
Here the markets were traded before the opening bell on Monday evening:
S&P 500 futures (ES = F): +2.5 points (+ 0.06%), to 4,293.75
Dow futures (YM = F): +10 points (+ 0.03%), to 33,880.00
Nasdaq Futures (NQ = F): +20.75 points (+0.14%) to 14,483.00
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter