Stock futures climbed on Wednesday morning, a day after the major averages made a failed attempt at a bounce.
Futures tied to the Dow Jones Industrial Average jumped 128 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures each rose about 0.4%.
In early trading, Pinterest shares jumped more than 4% on news that CEO Ben Silbermann is stepping down.
General Mills shares rose more than 2% after the company topped earnings and revenue forecasts for its most recent quarter.
Meanwhile, Carnival Corp slid nearly 8% in premarket trading after Morgan Stanley cut its price target on the stock in half and said it could potentially go to zero in the face of another demand shock. The call dragged other cruise stocks lower. Royal Caribbean lost 4% and Norwegian Cruise Line Holdings fell 3%.
Bed Bath & Beyond shares plummeted more than 14% after the company posted a huge miss on quarterly earnings and revenue expectations and announced its CEO is stepping down.
Investors are looking ahead to comments from Federal Reserve Chairman Jerome Powell at the European Central Bank forum. Earnings from Bed Bath & Beyond, General Mills and McCormick are also on deck.
Wednesday’s moves followed steep losses for the major averages the day before. The Dow fell more than 1.5% on Tuesday, while the S&P 500 and Nasdaq Composite slid 2% and 3%, respectively. The benchmarks all started the session with strong gains, but disappointing consumer confidence data halted those advances and sent stocks tumbling.
As the second quarter comes to an end on Thursday, there are rising recession fears. Concern over a slowing economy and aggressive rate hikes consumed much of the first half of 2022 as investors continue to search for a bottom to a vicious market sell-off.
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The S&P 500, which is down about 20% in 2022, is on pace for its worst first half of the year since 1970, when the index lost 21.01%. Meanwhile, on a quarterly basis, both the Dow and S&P 500 are on track for their worst performance since 2020. The Nasdaq is headed toward its worst three-month period since 2008.
“We expect significant volatility this summer, with ‘face-ripping’ short-covering rallies followed by economically-inspired market slumps,” Well Fargo senior equity analyst Christopher Harvey said in a note Wednesday. “While a much anticipated market ‘washout’ could catalyze a more sustained move higher, we think the market will not sustain a rally until it believes the Fed will toggle from a 50-75bp tightening to a more mundane 25bp increase.”
All the major averages ended Tuesday’s session in the negative, except for energy, which rose 2.7% as oil prices rallied.
Just three Dow stocks ended the day higher, with the losses led by Nike. Shares of the sportswear company fell 7% after it warned that higher transportation costs and shipping delays would likely persist.
Beaten-up chip stocks Nvidia and Advanced Micro Devices ended the day more than 6% lower while big technology names including Netflix, Amazon and Meta Platforms closed down about 5% each.
“As long as the sell-off is orderly,” the Fed is “not concerned with the level of stock prices,” Guggenheim Partners’ Global CIO Scott Minerd told CNBC’s “Closing Bell: Overtime” on Tuesday. “The bottom line is until we see some amount of panic here or something that gets the central bankers concerned, they are just ‘hellbent’ to get inflation under control.”