U.S. stock futures were lower early Wednesday morning as investors looked to build on a solid Tuesday rally.
Futures for the Dow Jones Industrial Average shed 88 points, or 0.27%. S&P 500 futures sat 0.42% lower while Nasdaq 100 futures slipped 0.55%.
The move in futures came as the stock market’s recent sell-off appeared to have paused. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 gained 2% and the Nasdaq Composite climbed nearly 2.8%.
The Dow has declined for seven straight weeks, but stocks have stabilized over the last three trading sessions.
Last week, the S&P 500 fell to the brink of a bear market — or 20% below its record high — but the index has now gained 4% since Thursday’s close.
Stocks and other risk assets have been pressured by inflation and the Federal Reserve’s attempt to tamp down price increases through rate hikes, which has led to concerns about a potential recession. Fed Chair Jerome Powell said at a Wall Street Journal conference on Tuesday that “there won’t be any hesitation” about raising rates until inflation is under control.
However, some recent economic data, including the jobs report and retail sales data from April, still show the U.S. economy growing.
“There’s a big difference between corrections in the equity markets and outright bear markets,” said Matt Stucky, a senior portfolio manager at Northwestern Mutual Wealth Management. “The difference being bear markets are almost always sort of associated with some kind of recessionary macroeconomic environment, or at least an inevitable one in the forecast horizon over the next six-to-12 months. For us, as we sit here today, we just don’t see that.”
A busy week of retail earnings continues on Wednesday, with Target and Lowe’s reporting results before the opening bell.
Investors will also get an updated look at the housing market, with data for housing starts and building permits for April due out Friday morning.