Traders on the floor of the NYSE, October 21, 2022.
Source: NYSE
Stock futures rose on Tuesday as Wall Street tried to start the new year strong.
Futures linked to the Dow Jones Industrial Average rose 158 points, or 0.47%. S&P 500 futures rose 0.55% and Nasdaq 100 futures rose 0.75%. Tesla shares fell nearly 4% in premarket action after disappointing fourth-quarter deliveries.
Investors are looking for signs that the global economy will continue to recover in 2023 and stocks will rise as the problems that weighed on markets ease in 2022. Although there are fears that the Federal Reserve’s rate hikes to control high inflation could push the US economy into a recession, it would also likely lead to a pause in rate hikes or a turn to rate cuts later in the year, which could boost stocks .
“We continue to see the ‘glass half full’ as the end of a period of ‘free money’ and overstimulation of the economy suggest better times ahead for both equity and bond markets going forward in the new year,” wrote John Stoltzfus. chief investment strategist at Oppenheimer, in a note on Tuesday.
History also shows that the US stock market tends to bounce back after years of decline. In fact, the S&P 500 has recovered, on average, 15% the following year after a year in which it lost more than 1%.
The major averages closed 2022 with their worst annual losses since 2008, snapping a three-year winning streak. The Dow ended the year down 8.8% and 10.3% off its 52-week high. The S&P 500 lost 19.4% for the year and is more than 20% below its all-time high. The tech-heavy Nasdaq fell 33.1% last year.
Investors receive a set of data during the first trading week of the year that will provide more insight into the state of the economy. First up, the S&P Global Manufacturing PMI and Construction Spending, due out Tuesday at 9:45am and 10:00am ET.
Wednesday is a big day with the Job Openings and Labor Turnover Survey, better known as JOLTS, due out in the morning and minutes from the Fed’s latest policy meeting coming out in the afternoon.
They also await Friday’s December jobs report, the final jobs report the Fed will have to consider before its next meeting on Feb. 1. There are also several speeches by Fed chairmen scheduled for Thursday and Friday.