U.S. stock markets were subdued early Tuesday, with stock futures slightly higher as investors focused on the Federal Reserve’s interest rate plans and the COVID outbreak in China.
Futures tied to the S&P 500 (^GSPC) rose 0.2%, while futures on the Dow Jones Industrial Average (^DJI) rose by roughly the same margin, or 60 points. Contracts on the tech-heavy Nasdaq Composite (^IXIC) were nearly balanced.
Wall Street is awaiting comments from Federal Reserve Chairs Loretta Mester and James Bullard Tuesday for further guidance on the Federal Reserve’s next monetary policy moves.
On Monday, San Francisco Federal Reserve Bank President Mary Daly said officials could raise the Federal Reserve’s interest rate above 5% if inflation doesn’t ease. Daly also noted that writing off a 75 basis point hike in December is “premature” and “nothing is off the table.”
In commodity markets, oil pared Monday’s losses after falling to January lows on fears fresh lockdowns in China and a reported increase in output from Saudi Arabia and OPEC could weigh on demand. Energy Secretary Prince Abdulaziz bin Salman has since refuted the prospect of boosting production and helped oil recover from the declines. West Texas Intermediate (WTI) crude futures rose to around $81 a barrel after hitting $75 a barrel on Monday.
On the corporate side, shares of Zoom Video Communications (ZM) fell nearly 10% premarket after the video conferencing platform trimmed its full-year revenue outlook and forecast further challenges from slowing demand for online meetings.
A precipitous rise in COVID cases across China has unleashed a wave of new restrictions on the world’s largest economy, just weeks after investors hailed the end of aggressive lockdowns in the country.
“The specter of COVID still looms over the Chinese economy, threatening to once again confuse supply chains and demand for commodities,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, in a note Tuesday.
The S&P 500 started the holiday-shortened Thanksgiving week lower compared to previous years. The index has historically traded slightly lower on Thanksgiving week Monday, down 0.01%, according to data from Bespoke Investment Group. In years when the index is down 10% or more year-to-date, like in 2022, performance has been more positive, with an average gain of 0.37%.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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