Stock Groups

Stock futures rise slightly after sell-off on Wall Street, more bank earnings ahead

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Traders in New York City work at the New York Stock Exchange (NYSE), New York City, U.S.A, January 10, 2022.

Brendan McDermid | Reuters

U.S. stock options rose slightly on Tuesday after an overnight sell-off in Wall Street due to surging bond yields.

Dow futures went up 50 points S&P 500 futures gained 0.2% and Nasdaq 100 futures rose 0.25%.

The Dow Jones Industrial Average fell more than 540 point on Tuesday due to a drop of 7% in the price. Goldman Sachs‘ stock. As operating expenses rose 23%, analysts were disappointed that Wall Street Bank failed to meet earnings expectations.

The S&P 500 declined 1.8%. The relative underperformer was the Nasdaq composite, which is full of high-interest technology stocks and has a decline of 2.6%. Investors were concerned about how fast the Federal Reserve would raise interest rates and closed down Nasdaq at its lowest point in three months.

On Tuesday, bond yields were at their highest point in two years as the 10-year Treasury reached 1.87%. In the beginning of the year, the 10-year yield was around 1.5%. Meanwhile, the 2-year rate — which reflect short-term interest rate expectations — topped 1% for the first time in two years.

Investors are now preparing for more aggressive Federal Reserve tightening.

Ryan Detrick, LPL Financial said that the “2-year yield exceeding 1%” is the bond market indicating its agreement with the Fed about more aggressive Fed hikes. Add to that the worries about crude oil flirting at $85 per barrel and persistently high inflation and you have the perfect recipe for a day of risk.

The S&P 500 ended the day nearly on top of its 100-day moving average. Jim Paulsen is chief investment strategist for the Leuthold Group. He said that traders will closely monitor if the index maintains this level or falls below it.

Paulsen stated, “With an economic calendar light this week, all eyes are on key technical support levels and earnings reports, as well as whether bond yields continue to surge towards 2% or take a break.”

Reports from Bank of AmericaAnd Morgan StanleyBefore the bell.

Of the 33 S&P 500 companies that have reported quarterly results, nearly 70% have topped Wall Street’s expectations.

Procter & Gamble, U.S. Bancorp, UnitedHealthAnd United AirlinesOn Wednesday, earnings for the quarter will also be reported.

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