Daily Stock Market News

Stock futures open lower after S&P 500 posts worst month since March 2020


Contracts on Wall Street’s main indexes edged lower in pre-market trading Tuesday after stocks bounced back from a losing streak in the previous session to cap the last day of a historically volatile January in the green.

Futures tied to the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite fell in overnight trading after the S&P 500 recorded its roughest monthly performance since March 2020 in Monday’s session. Meanwhile, the Nasdaq Composite narrowly avoided its worst-performing January on record after a loss of 8.98% for the month amid a deepening rout in technology stocks prompted by rate-hike jitters.

Anxiety around how quickly and significantly the Federal Reserve will lift interest rates has made for a volatile month for equities as investors dump high-valued, growth assets poised for vulnerability in an environment of higher borrowing costs. The S&P 500 closed the month nearly 6% lower, the Dow Jones Industrial Average was down 4%, and the tech-heavy Nasdaq ended down 10%.

Markets are bracing for a bump of at least 25 basis points next month after Fed Chair Jerome Powell implied last week that a liftoff on interest rates to above their current near-zero levels was likely to come in March as policymakers look to tighten financial conditions amid a backdrop of surging inflation.

“Investors are watching the Fed,” Thornburg Investment Management co-head of investments Jeff Klingelhofer told Yahoo Finance Live. “We are absolutely in a period of heightened volatility, and we think it’s here to stay for some time.”

Despite a turbulent month, history suggests buying stocks after major plunges has paid off. According to new research from Goldman Sachs (GS) strategist David Kostin, a look at data since 1950 showed an investor buying the S&P 500 (^GSPC) 10% below its high, regardless of whether it was the trough, would have netted a median return of 15% over the next 12 months.

“There are two parts to the ‘buy-the-dip’ phrase: Buy the dips and sell the rips,” said Interactive Brokers chief strategist Steve Sosnick on Yahoo Finance Live. “I think this is an environment you are going to get the opportunity to do both.”

Monday commenced a prolific week for this earnings season, with more than 100 companies in the S&P 500 set to report fourth quarter results through Friday. Alphabet (GOOG, GOOGL) is set to unveil figures after the bell on Tuesday, with results from Amazon (AMZN) and Facebook, now Meta Platforms (FB), due out later this week.

On the economic front, investors will tune in Tuesday for fresh reads on manufacturing and employment. The U.S. Bureau of Labor Statistics will release results from its latest Job Openings and Labor Turnover Survey (JOLTS) Tuesday morning to offer a fresh snapshot of the labor market’s recovery.

7:25 a.m. ET: AT&T to spin off WarnerMedia in $43 billion Discovery deal

Telecomm giant AT&T Inc (T) announced it will spin off subsidiary WarnerMedia in a transaction to merge its media properties with Discovery Inc. (DISCA) valued at $43 billion. The company is also expected to cut its dividend by nearly half as part of the deal.

Shares of AT&T were down 4.35% in pre-market trading to $24.39 a piece as of 7:25 a.m., while Discovery stock was mostly flat at around $27.87 per share.

AT&T shareholders will own 71% of the new, resulting company and receive 0.24 shares of Warner Bros. Discovery for each AT&T share they own. The telecommunications group will have 7.2 billion diluted shares outstanding after the transaction closes. The company will distribute shares of the new Warner Bros. Discovery as a dividend of $1.11 per share, down from $2.08 per share, the lower end of a $8 billion to $9 billion range AT&T had projected earlier.

7:00 a.m. ET: Contracts on Wall Street’s main indexes edge lower after volatile January

Here’s how the main benchmarks fared ahead of Tuesday’s open:

  • S&P 500 (^GSPC): -11.75 (-0.26%) to 4,492.50

  • Dow (^DJI): -54.00 (-0.15%) to 34,943.00

  • Nasdaq (^IXIC): -28.25 (-0.19%) to 14,876.75

  • Crude (CL=F): -$0.27 (-0.31%) to 87.88 a barrel

  • Gold (GC=F): +$10.30 (+0.57%) to $1,806.70 per ounce

  • 10-year Treasury (^TNX): 0 bps to yield 1.7820%

6:01 p.m. ET Monday: Futures dip after S&P 500 posts worst month since March 2020

Here were the main moves in markets heading into overnight trading:

  • S&P 500 (^GSPC): -9.00 (-0.20%) to 4,495.25

  • Dow (^DJI): -50.00 (-0.14%) to 34,947.00

  • Nasdaq (^IXIC): -29.50 (-0.20%) to 14,875.50

  • Crude (CL=F): +$0.03 (+0.03%) to 88.18 a barrel

  • Gold (GC=F): +$2.40 (+0.13%) to $1,798.80 per ounce

  • 10-year Treasury (^TNX): 0 bps to yield 1.7820%

Traders work on the floor of the New York Stock Exchange at the opening bell January 25, 2022. - Wall Street stocks fell early January 25 following a deluge of mostly solid corporate earnings but a lower global growth forecast from the IMF. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

Traders work on the floor of the New York Stock Exchange at the opening bell January 25, 2022. – Wall Street stocks fell early January 25 following a deluge of mostly solid corporate earnings but a lower global growth forecast from the IMF. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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