Futures of U.S. stocks were flat on Tuesday night after the Dow Jones Industrial Average fell nearly 300 points amid growing investor concern about the state of the economic recovery and the upcoming Federal Reserve action.
Dow Jones Industrial Average futures added eight points more, 0.02%. The S&P 500 and Nasdaq 100 futures were up 0.05% and 0.08%, respectively.
On Tuesday, during regular trading, the Dow fell 292.06 points, or 0.8%, to 34,577.57, falling after a five-day losing streak on Monday. The S&P 500 lost 0.6% to finish at 4,433.05 and the Nasdaq Composite fell 0.5% to 15,037.76.
The Dow, S&P and the small Russell 2000 chapter have been trading in black for six of the last seven days. Tuesday marked the fifth consecutive day of Nasdaq losses. Historically, September has been a low month for markets, which have recorded an average drop of 0.56% since 1945, according to CFRA. And after eight months of direct gains, strategists say a major setback could be imminent.
The S&P 500 has continued to advance throughout the year, falling below the 50-day moving average only once, according to Fundstrat. Mike Wilson, investment director at Morgan Stanley, told CNBC’s “Fast Money” that it might just be the beginning.
“The mid-cycle transition always ends with an index correction,” he said of the S&P 500. “Maybe it will be this week, maybe a month from now. I don’t think we’re going to end this year, though. 50-day moving average that is maintained throughout the year because that is the pattern we normally see in this part of the recovery phase. ”
On Tuesday, the Department of Labor released pre-bell data showing a lower-than-expected rise in U.S. inflation for August. Consumer prices rose 5.3% from a year ago and 0.3% from July. Eliminating food and energy, the consumer price index rose just 0.1% during the month.
Initially, the markets were concentrated but backtracked after the market opened, as uncertainty settled over when the reduction in the purchase of Federal Reserve assets was reduced.
“The Federal Reserve is likely to delay the slowdown in the purchase of Treasury securities and mortgage guarantees despite the few indications that the rise in the price of durable goods is transitory, as illustrated by the reduction in used vehicle prices,” he said. Dawit Kebede, senior economist at Credit Union National Association. “This is because we are far from maximum employment,” one of the Fed’s two goals of its dual term.
Although the data was colder than expected, inflation remains hot, according to Brad McMillan, chief investment officer of the Commonwealth Financial Network.
“We will probably see inflation go down at least the rest of the year and possibly until 2022,” he said. “But we see the change in trend, which shows that the grassroots change is becoming effective and that the economy is healing.”
Shares linked to the economic recovery fell on Tuesday. United Airlines fell 2.1% and Bank of America lost 2.6%. General Electric closed down 3.9%.
Casino stocks were very successful, as the Macau government wants to increase regulatory control over casinos and Chinese health authorities reported an outbreak of Covid-19. Las Vegas Sands fell 9.7%, Wynn Resorts fell 10.8% and MGM complexes lost 3.9%.
Shares of Apple closed nearly 1% lower after the company unveiled the iPhone 13 at its annual product launch event.
Wednesday is the last day of the SALT conference in New York. In terms of economic data, U.S. import and export prices and mortgage application data are expected to be released on Wednesday.