Stock futures edged up slightly Tuesday evening following a rough day on Wall Street that saw the major indexes plunge over 1% amid weak housing and consumer confidence data.
Dow futures rose 34 points, or 0.1%, after the Dow Jones Industrial Average sank 388 points, or 1.14%, Tuesday for its worst one-day drop since March. S&P 500 and Nasdaq 100 futures both added 0.1%, as investors appeared to take a small breath after the S&P 500 fell 1.47% and the tech-heavy Nasdaq dropped 1.57% in the regular trading session.
The losses came as concerning new numbers on the housing market and consumer spending appetite dragged down the major indexes. New home sales underwhelmed in August, totaling an annualized 675,000 according to Commerce Department data, falling short of economists’ forecasts of 695,000.
Meanwhile, the Conference Board’s consumer confidence index sank to 103 in September, down from 108.7 the previous month and lower than expectations of 105.5.
“Consumers remain worried about inflation and the impact of higher borrowing costs. This also weighed on housing market activities as mortgage rates tick higher,” explained U.S. Bank Asset Management senior investment strategist Rob Haworth.
Nonetheless, Haworth noted “still-high accumulated consumer savings balances, a strong labor market and solid wage growth are providing some support as we near the fourth quarter of the year.”
Other analysts agreed the pullback was not entirely surprising given typical September volatility. “The market is currently living up to its ‘seasonally weak September,’” observed Blanke Schein Wealth Management’s chief investment officer Robert Schein, with the S&P 500 down over 5% month-to-date.
Looking ahead, Schein believes October could bring a reversal: “Earnings season begins in mid-October and if earnings results are better-than-feared, that just may be the catalyst needed to end this market correction.”
In corporate news, Costco shares sank 2.5% in extended trading after the retail giant reported fiscal fourth quarter results. While Costco beat expectations on earnings and revenue, its comparable sales grew just 1.1% year-over-year, slowing from 16.7% growth in the year-ago quarter.
On Wednesday, investors will eye new data on durable goods orders for August, expected to show a 0.5% decline. Earnings reports are also due from Paychex before the bell and semiconductor giant Micron after the close.
Micron’s results may provide key insights into the health of the battered chip sector. Shares are down nearly 50% in 2022 amid falling demand. But signs of a turning point could boost morale across tech.
As the third quarter wraps up, markets remain volatile after a tough year. But the expected slowdown in Fed rate hikes and hopes for resilient corporate profits could pave the way for a comeback in 2023. For continued coverage of stocks to watch and market analysis, follow this publication.
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