U.S. stock index futures rose during early morning trading Tuesday after the major averages started the week in the red as Covid omicron fears hit sentiment.
Futures contracts tied to the Dow Jones Industrial Average gained 136 points. S&P 500 futures and Nasdaq 100 futures were both cautiously higher.
During regular trading, the Dow slid 0.89%, or 320 points, while the S&P 500 dipped 0.9%. The Nasdaq Composite fell 1.39% as investors rotated out of technology stocks with high valuations.
While equities fell broadly on Monday, growth areas of the market underperformed. The iShares Russell 1000 Growth ETF dipped 1.22%, while the iShares Russell 1,000 Value ETF declined 0.45%.
The Federal Reserve also kicks off its two-day meeting on Tuesday. The central bank will release a statement on Wednesday with quarterly projections for the economy, inflation and interest rates. Chairman Jerome Powell will also hold a press conference.
Investors will be watching closely for commentary around if the Federal Reserve plans to accelerate the end of its bond-buying program. At present, the central bank’s asset purchase program will end in June 2022, but several officials have spoken about ending the purchases sooner.
“So far the bond market has given the Fed a pass on inflation — whether it will continue to do so is in doubt,” noted Willie Delwiche, investment strategist at All Star Charts. “The real fireworks coming from the meeting are likely to be around expectations for rate hikes in 2022,” he added.
Despite Monday’s decline for equities, the S&P 500 is roughly 1.6% below its Nov. 22 all-time intraday high. The Dow is 2.5% below its record, while the Nasdaq Composite is about 5% under its high-water mark. The Russell 2000 index is down a sharper 11.3% since its Nov. 8 high.