U.S. stocks fell early Tuesday after a bounce last week snapped the longest losing streak for the S&P 500 in over 20 years.
The benchmark fell 0.8% following its best week since November 2020, and the Dow Jones Industrial tumbled 380 points, or 1.2%. The Nasdaq Composite declined 0.6%. The moves come after all three indexes logged weekly gains of more than 6%, clawing back from seven consecutive losing weeks for the S&P 500 and Nasdaq and eight weeks of losses for the Dow.
Meanwhile, oil futures charged higher amid reports Chinese authorities were poised to end a two-month COVID-19 lockdown in Shanghai and an agreement by EU leaders to stop purchases of crude oil and petroleum products from Russia. WTI crude oil futures climbed 3.6% to $118.70, while Brent crude oil futures rose 3.7% to $123.83.
Shares of movie theater giant AMC (AMC) jumped 10% in early trading following the debut of TOP GUN during Memorial Day weekend. U.S. theaters saw an estimated 122% year-over-year increase from last year’s holiday weekend, AMC said in a statement Tuesday, underscoring positive signs of a post-COVID recovery for the industry. The pre-market moves place AMC shares on pace for a fourth straight day of gains after the stock surged nearly 40% in the past three sessions.
Wall Street’s latest rally comes on the heels of a favorable batch of quarterly earnings in recent trading sessions which helped temporarily mitigate concerns over the toll of inflation on corporate profits. Signs from recent economic data that prices were peaking also helped buoy sentiment.
Still, stocks are sharply down for the year, and some strategists have been skeptical about whether a bottom has been established.
“Last week’s strength will prove to be another bear market rally in the end,” Morgan Stanley CIO Michael Wilson said in a note to clients.
Despite recovering some losses, stocks have had a volatile month, wrought by concerns over decades-high inflation and fears the Federal Reserve’s efforts to rein in surging prices by raising interest rates may tip the economy into a recession.
“The primary rationale ascribed to this particular rally beyond just an oversold bounce is that the Fed may be contemplating a pause in September,” Wilson wrote, adding that “inflation remains too high for the Fed’s liking and so whatever pivot investors might be hoping for will be too immaterial to change the downtrend in equity prices.”
This week, investors are expected to take their cue from a flurry of key employment data, including the all-important May jobs report due out Friday.
Earnings season has wound down, but more reports from companies including Salesforce.com (CRM), GameStop (GME) Chewy (CHWY), and HP (HPQ) remain in the queue through Friday.
9:30 a.m. ET: Stocks slip as Wall Street struggles to sustain momentum
Here’s where the major indexes traded at the start of Tuesday’s session:
S&P 500 (^GSPC): -14.99 (-0.36%) to 4,143.25
Dow (^DJI): -205.49 (-0.62%) to 33,007.47
Nasdaq (^IXIC): +390.43 (+3.33%) to 12,131.13
Crude (CL=F): +$3.85 (+3.35%) to $118.92 a barrel
Gold (GC=F): -$3.00 (-0.16%) to $1,854.30 per ounce
10-year Treasury (^TNX): +9.9 bps to yield 2.8420%
7:14 a.m. ET: Futures slip after recovery rally caps weeks-long losing streak for stocks
Here were the main moves in early trading Tuesday to start the holiday-shortened week:
S&P 500 futures (ES=F): -15.05 (-0.36%) to 4,140.75
Dow futures (YM=F): -130.00 (-0.39%) to 33,028.00
Nasdaq futures (NQ=F): -3.00 (-0.02%) to 12,674.75
Crude (CL=F): +$3.63 (+3.15%) to $118.70
Gold (GC=F): -$5.60 (-0.03%) to $1,851.70 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 2.7430%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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