Stock futures slip in early morning trading after tech-led rally

Stock futures slip in early morning trading after tech-led rally

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Stock futures slipped in early morning trading Tuesday as traders continue to assess the bond market’s warning signals and latest developments in the Ukraine-Russia war.

Futures on the Dow Jones Industrial Average traded 60 points lower, or 0.2%. S&P 500 futures and Nasdaq 100 futures were down 0.2% each.

Treasury yields rose broadly Tuesday, but rates on shorter-term bonds continued to trade above their longer-dated counterparts. The 2-year yield was at 2.461%, while the 10-year yield traded at 2.45%. The 5-year yield climbed to 2.6%, while the 30-year rate traded around 5.51%.

These so-called yield curve inversions have historically preceded recessions, so they are closely watched by investors.

Investors also kept an eye on Europe, as the war between Ukraine and Russia dragged on. Ukraine President Volodymyr Zelenskyy pledged to pursue allegations of war crimes against Russian forces, noting that more than 300 people were killed and tortured in a suburb near the capital of Kyiv. (Click here for the latest.)

“Markets have been resilient given the war in Ukraine, continued price pressures, and uncertain global economic outlook, with investors’ ‘buy the dip’ mentality driving equity returns,” said Mark Hackett, Nationwide’s chief of investment research.

Oil prices, which have shot up since the onset of the war amid concerns over supply disruptions, climbed Tuesday. West Texas Intermediate futures were up 0.8% at $104.07 per barrel. Brent crude gained 0.6% to $108.20.

Those moves come after a tech-led rally that saw the Nasdaq Composite rise 1.9% on Monday. Shares of Twitter surged 27% for its best day ever after Elon Musk disclosed a 9.2% passive stake in the social media company. On Tuesday, the stock was up another 1.8%.

The blue-chip Dow rose about 100 points to begin the trading week, while the S&P 500 advanced 0.8%, both posting their second straight day of gains.

“In the near-term, we believe indiscriminate selling has created attractive entry points, particularly into some high-growth-potential stocks,” Tony DeSpirito, CIO of U.S. fundamental equities at BlackRock, said in a note.

The new quarter has kicked off after the major averages finished their worst quarter in two years. Investors are awaiting the Federal Reserve meeting minutes Wednesday for further clues on the central bank’s rate-hike path. Meanwhile, the first-quarter corporate earnings season is set to begin next week.

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