US stock futures rise after three-day global sell-off
US stock futures rose on Monday as some buyers waded into the market, following a three-day global selloff that was fueled by fears of a US economic slowdown and extreme tech-sector valuations.
Futures on the S&P 500 Index traded 0.5% higher as of 5:20 a.m. in New York, having earlier risen as much as 1.4%. Contracts on the Nasdaq 100 futures were up 0.6%, paring an earlier 1.7% advance. Markets bounced back elsewhere as well, with Japan’s Topix jumping more than 8% as the yen weakened after a five-day surge against the US dollar.
Tuesday’s bounce comes after the S&P 500 shed 6% over the past three sessions. The turmoil was sparked by data showing a rise in US unemployment, causing investors to worry whether the Federal Reserve is moving quickly enough to cut interest rates in order to stave off a recession. The print followed a Bank of Japan interest-rate hike, which sparked an unwinding of yen-funded carry trades — the practice of borrowing cheaply to fund purchases of higher-yielding assets elsewhere, including technology stocks.
The selloff has cooled the global artificial intelligence rally, which had driven stocks to record highs in recent weeks. Some market players such as Mike O’Rourke, chief market strategist at Jonestrading, downplayed the setback.
“A 10% or more correction is absolutely appropriate amid such market strength,” O’Rourke wrote in a report.
Concerns of an abrupt downturn were somewhat allayed by numbers Monday showing the US services sector expanded in July, after the worst contraction in four years a month earlier. Economic data releases over the coming weeks will be key to gauging the Fed’s next move and the direction of stocks.
Among individual stocks, Nvidia Corp. rose as much as 3% in
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