US equity futures are flat after Dow sheds 290 points

US equity futures are flat after Dow sheds 290 points

U.S. equity futures were flat Tuesday night after the Dow Jones Industrial Average fell nearly 300 points amid growing investor concerns about the state of the economic recovery and the Federal Reserve’s next move.

Dow Jones Industrial Average futures rose 8 points, or 0.02%. The S&P 500 and Nasdaq 100 futures contracts rose 0.05% and 0.08% respectively.

In regular trading on Tuesday, the Dow Jones fell 292.06 points, or 0.8%, to 34,577.57, after falling after five days of losses on Monday. The S&P 500 lost 0.6% to 4,443.05 and the Nasdaq Composite slipped 0.5% to 15,037.76.

The Dow, S&P and Russell 2000 Small Cap are now trading in the red for six of the past seven days. Tuesday was the fifth consecutive day of losses for the Nasdaq. According to the CFRA, September has historically been a month of decline for the markets, the month having recorded an average decline of 0.56% since 1945. And after eight consecutive months of gains, strategists say a major pullback could be imminent .

According to Fundstrat, the S&P 500 continued to advance throughout the year, falling just once below the 50-day moving average. Morgan Stanley chief investment officer Mike Wilson told CNBC’s “Fast Money” that this 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. I don’t think so. not that we’ll be working with this year, though, with that 50-day moving average throughout the year, because that’s the trend we usually see.Let’s look at that part of the recovery phase.

On Tuesday, the Labor Department released data before the bell, showing a weaker-than-expected rise in US inflation for August. Consumer prices increased 5.3% from a year ago and 0.3% from July. Excluding food and energy, the consumer price index rose only 0.1% over the month.

Initially, the market was bullish, but closed after the market opened due to uncertainty over the timing of the decline in asset purchases by the Federal Reserve.

Davit Kebede, Senior Economist at the Credit Union, said: “The Federal Reserve will likely delay the slowdown in purchases of Treasury securities and mortgage-backed securities, despite modest signs that price increases in durable goods are temporary, as in the case of a used car. This is evident from the fall in prices. National association. “It’s because we are far from maximizing employment”, one of the two objectives of the Fed’s dual mandate.

According to Brad McMillan, chief investment officer at Commonwealth Financial Network, while the data was colder than expected, inflation is still on the rise.

“We will likely see inflation heat up for at least the rest of the year and maybe until 2022,” he said. “But we are seeing a change in trend, which indicates that the base change is taking effect and the economy is recovering.”

Stocks linked to the economic recovery fell on Tuesday. United Airlines fell 2.1% and Bank of America fell 2.6%. General Electric closed 3.9% lower.

Casino stocks have been hit hard as the Macau government seeks to increase regulatory oversight of casinos and Chinese health officials report the COVID-19 outbreak. Las Vegas Sands fell 9.7%, Wynn Resorts 10.8% and MGM Resorts 3.9%.

Apple shares closed nearly 1% lower after the company showcased the iPhone 13 at its annual product unveiling event.

Wednesday is the last day of the SALT conference in New York. In terms of economic data, US import and export prices and mortgage application data are expected to be released on Wednesday.

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