Traders on the floor of the New York Stock Exchange, May 6, 2022.
Stock futures rose on Sunday night after a week of heavy losses ended on a high note, and ahead of a big week of gains for retailers.
Futures linked to the Dow Jones industrial average rose 89 points, or 0.3%, while futures on the S&P 500 rose 0.4%. Nasdaq 100 futures rose 0.6%.
On Friday, the Dow was up 466.36 points, or 1.47%, while the S&P 500 was up 2.39%. The Nasdaq Composite jumped 3.82% and posted its biggest one-day gain since November 2020. Still, all three averages posted losses in weeks.
The gains came as investors went into relief rally mode to cap a poor week for stocks in which the S&P 500 almost dipped into bear market territory.
It remains to be seen, however, how long the rally will last or how much further stocks will have to fall before this year’s downtrend bottoms out.
“Given the history of bear markets, coupled with the fact that the Fed has just started its rate hike cycle and would like to see financial conditions continue to tighten for demand to pull back further, this will most likely rebound weakens,” Quincy Krosby said. , chief equity strategist at LPL Financial.
Still, some investors and analysts say that bottoming or not, there are good buying opportunities at current market lows.
“I’m not calling the bottom here, but there is an opportunity here for dollar cost averaging,” Sylvia Jablonski, CEO and chief investment officer of Defiance ETF, told CNBC. “If you have a lot of cash, you’re locking in losses due to inflation. Investing in stocks or asset classes you believe in… is the lesser of evils. Selling fatigue will subside, the market is unlikely to see the Dow and the S&P are in correction territory in six months or a year.
Retail earnings season kicks off this week with several big retailers set to report first-quarter results, including Walmart, Target and Home Depot. Elsewhere, Deere is also on deck, along with a handful of tech companies.
Investors will also be keeping an eye on this week’s retail sales data, which could give them an idea of how retailers are handling inflation, which remains near 40-year highs.